UK wealth management firm AFH has seen one of its shareholders go against its advice and reject the £224.5m offer for the company by US private equity firm Flexpoint Ford.
According to The Times, Slater Investments, which owns almost 13% of AFH, could start a revolution after turning down the offer.
AFH needs backing from at least 75% of shareholders for the deal to complete. If other investors join Slater in its rebellion, the deal could be blocked.
Mark Slater, chief investment officer of Slater Investments, told the newspaper: “We just don’t think they should be looking to sell.”
See also: Mark Slater issues fat cat pay warning to fund holdings
In January AFH urged shareholders to back the deal.
AFH said in a London Stock Exchange statement on 22 February: “The independent directors would like to reiterate that they consider the terms of acquisition to be fair and reasonable, believe the acquisition is a good deal for all shareholders, and therefore shareholders vote in favour of the scheme.”
Portfolio Adviser sister title International Adviser contacted Flexpoint and Slater Investments for a comment. Flexpoint declined to comment and the other firm did not respond in time for publication.
Proposed deal
The acquisition offer sets the price per scheme share at 463 pence, which equates to a valuation of £224.5m.
In January 2021, AFH’s independent directors said they “remain confident” in the firm’s prospects, but believe that partnering with Flexpoint will “assure the successful delivery of the growth strategy and unlock the full potential of the group over the long term”.
Flexpoint will be acquiring AFH via its Cayman Island’s subsidiary Bidco, which was formed specifically to buy the company.
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