Martin Gilbert’s business Assetco has become the sole bidder for River & Mercantile after Premier Miton’s decision to walk away from talks.
In a regulatory filing on Thursday morning, Premier Miton chief executive Mike O’Shea (pictured) said the company had concluded there were “insufficient commercial merits” to make a formal proposal for the acquisition of River & Mercantile. It had been in a bidding war for the UK fund house alongside Assetco since November.
“We are most grateful to the board of RMG for their co-operation and assistance as we have assessed the merits of a possible transaction, especially so given the major changes ongoing in their business,” O’Shea said.
Premier Miton would continue its organic growth plans while still exploring tactical and strategic opportunities, he added.
In an analyst note, Peel Hunt said it had seen various issues in the potential bid for River & Mercantile, including overlap, culture and the “likely loss making nature of the target” given the sale of the profitable solutions business to Schroders. Additionally, the rival interest from Assetco meant Premier Miton was unlikely to get River & Mercantile at a cheap price.
River & Mercantile said it remains in discussion with Assetco, but said there was no certainty an offer would be made and that the focus on the board was completing the sale of the solutions business, which would return £180m to shareholders.
Peel Hunt added that Premier Miton itself could be a target in the current wave of M&A, particularly given its low valuation and mid-sized nature.
It has a buy rating on the asset manager with a target price of 251p.
See also: Assetco tipped as better home for R&M than Premier Miton
