Shortly before noon, Aberdeen shares were trading 4.55% higher at 445.10p, following on from the company’s decision to react to media speculation that it was interested in taking Edinburgh-based Swip on.
Aberdeen, which is headed up by Martin Gilbert, said the potential acquisition would add further scale and diversity to Aberdeen’s range and would “complement organic growth”, in line with the board’s strategy.
Moreover, Aberdeen also said that the proposed transaction would also offer substantial cost efficiencies and synergies, though it cautioned it was not certain a deal would go ahead.
Analyst verdict
Noting the sharp rise in Aberdeen’s shares following its announcement, brokers at RBC Capital Markets indicated they were not fully supportive of the deal, and felt that a rapid increase in dividends was unlikely if the acquisition went ahead.
Aberdeen paid out 11.5p in dividends during 2012 and RBC said it expected investors to receive in the region of 15.0p in 2013 and 18.0p in 2014. “While Aberdeen is likely to continue to increase its dividend, it will likely do so more incrementally,” RBC explained, adding that this meant Aberdeen’s story was now about growth, rather than dividend yield or capital return.
The bank also hinted that others may be sceptical of the deal going ahead, too. “The valuation is still attractive, and that is likely the reason for Aberdeen’s trading up 5% on the announcement,” RBC said.
