AFTER Macquarie swooped in with an eleventh hour bid last week, the long-rumoured acquisition of Swip by Aberdeen was all looking a bit uncertain.
But yesterday chief executive Martin Gilbert prevailed – handing over £550m in shares in return for around £136bn of assets under management, plus a deal to manage assets on behalf of Lloyds’ wealth, commercial banking, insurance and retail businesses.
Despite paying more than the rumoured £500m price tag – and a potential £100m extra if the tie-up goes well – Aberdeen has got a fair deal. Taking into account cost-cutting potential from the acquisition, brokers put the price at around 5.4x earnings – well below the sector average. The deal has also diversified Aberdeen’s assets, diluting its Asia and emerging markets focus with Swip’s UK equity and fixed income funds to make the company a much more balanced global player.
But Gilbert isn’t the only winner from yesterday’s announcement. Though Lloyds’ share rose just 1.05 per cent compared to Aberdeen’s 16 per cent, the state-backed bank is getting a decent balance sheet boost from the tie-up, increasing its core tier 1 capital by 11 basis points.
There will be inevitable integration challenges as Aberdeen looks for cost savings and brings Swip under its wing, but investors seem to be glad that Gilbert got his way. They should stick around to see how he makes the most of it.