Lindsell Train has ponied up £2m for Rathbones’ share placing as it looks to raise cash to snap up Saunderson House.
In an RNS statement, Rathbones announced that it had successfully placed 2.8 million ordinary shares at £17.60 a pop, a 7.9% discount to its closing price of £19.42 on Wednesday.
The wealth manager raised gross proceeds of £50m from institutional investors which will go toward funding its acquisition of £4.7bn financial planner Saunderson.
As Rathbones’ largest institutional shareholder Lindsell Train subscribed for 124,000 placing shares, raising £2.2m for the Saunderson deal.
At the beginning of June Nick Train (pictured) and Michael Lindsell’s boutique owned a 12% stake in the FTSE 250 wealth manager. However this is set to be diluted following the share issuance which will increase the volume in circulation by 5%.
Rathbones has been a key holding for Train in tapping into the burgeoning private wealth space, alongside Schroders and Hargreaves Lansdown.
See also: Nick Train highlights stellar returns from Rathbones as savings ratio soars
Other major institutional investors in Rathbones include Aviva Investors and Baillie Gifford which own 6.39% and 3.8% of the wealth manager respectively, according to data from Refinitiv.
Rathbones said the admission of the shares on the stockmarket will take place at 8am on 28 June. This will bring the total number of shares in issue to 61.4 million.
The Saunderson deal will see Rathbones become the UK’s third largest wealth manager, with £61bn in assets, and drastically expand its in-house financial planning capabilities.
It is anticipating underlying earnings per share growth of 10% and return on investment of 12% in the third year following the takeover.
In its Q1 results, Rathbones reported a 2% increase in assets under management to £55.8bn, with net inflows of £700m.
Rathbones’ share price today is £18.60.
