Jupiter shareholders have given the FTSE 250 fund house their stamp of approval to acquire rival firm Merian Global Investors for £370m later this summer.
The deal was approved overwhelmingly at Jupiter’s AGM on Thursday with a 95.04% approval rate compared with 4.96% of votes cast against the measure.
Jupiter chief executive Andrew Formica (pictured) described the support from shareholders as “an important milestone” which “reflects the strong strategic and financial rationale for the transaction”.
The deal with Merian still remains conditional “on a small number of provisions,” said Formica, including a stamp of approval from the Financial Conduct Authority.
But he said Jupiter remained on track to complete the acquisition on or shortly after 1 July 2020, adding that the integration of the two businesses had been “progressing smoothly despite the lockdown”.
Covid disruption was unlikely to prompt Jupiter to rethink Merian purchase price
Jupiter confirmed the tie-up with Merian in mid-February just days before the coronavirus sell-off took hold of global markets.
Both firms revealed massive hits to their assets under management in a joint Q1 trading update in April, with Merian’s assets plunging 30.1% to £15.7bn and Jupiter’s falling 18.3% to £35bn.
Willis Owen head of personal investing Adrian Lowcock said it’s unlikely the Covid disruption would have prompted Jupiter to rethink the price it was willing to pay for Merian.
“Jupiter are not just buying assets under management but also the expertise and skills of the managers and the team that come with the Merian brand,” Lowcock said.
“Their value hasn’t changed much in the current crisis – you could argue skilled fund managers are worth more in the current situation.”
“If anything, bringing the two together and getting the cost synergies and other benefits of scale delivered is even more relevant in a tougher environment,” said Tilney managing director Jason Hollands.
“The key is to execute the integration at pace, drive through the savings and then benefit from the revenues rebounding over time as markets recover.”
Jupiter’s largest shareholder votes against NED appointment
All the resolutions that were put forth at the AGM were passed by the requisite majorities, Jupiter confirmed.
But it noted “the level of votes cast against” the re-election of director Karl Sternberg which was approved by just 72.43%.
Jupiter said the result was driven by the votes of its largest shareholder, Silchester, disagreeing with Sternberg’s time commitments on the boards of other investment trusts. Sternberg is also the senior independent director of the £2.6bn Alliance Trust and is a NED for five other trusts including Baillie Gifford’s Monks Investment Trust and the Lowland Investment Company run by Janus Henderson.
Jupiter said Silchester, which owns a 19.2% stake in the business, “applies a more stringent voting policy on directors’ external commitments than is market practice”.
“The board strongly supports Karl’s re-appointment to the board and throughout his tenure Karl has clearly demonstrated his commitment to the company and ability to dedicate sufficient time to his duties,” Jupiter said. “The Nomination Committee carefully monitor all directors external time commitments and would take appropriate action should concerns be identified.
“In line with the requirements of the UK Governance Code, we will continue to engage with our major dissenting shareholders on this matter and provide the required updates on engagement.”
