HAYLEY TAM | CITI
"Whatever happens, it is likely to cause continued disruption to ongoing operations. If Sherborne loses the vote it will create a share overhang of about 17 per cent, which will need to be disposed of – but it will allow existing management to continue to run the company with minimum disruption. If F&C management loses, it will enter a new period of uncertainty that may or may not lead to longer-term value creation."
DAVID MCCANN | NUMIS
"Regardless of who wins the vote, it is hard to see any short-term share price upside, but very easy to see significant short-term downside risk. If Sherborne loses, the share price could fall 30 to 44 per cent, as Sherborne, Aviva and other supporters’ stakes become stock overhangs. If Sherborne wins, we expect Millennium BCP to withdraw its assets under management and an 11 per cent stock overhang from Eureko."
SARAH ING | SINGER CAPITAL
"Short of breaking the firm up to sell off low-margin businesses, it isn’t clear what F&C should do differently to address the current issues. Incumbent management has tried to invest in high margin businesses and isn’t to blame for F&C’s low valuation, which is largely a result of legacy issues, such as lack of organic growth in its funds due to ongoing insurance outflows and a lot of lower margin institutional business. F&C has also lost large chunks of assets over recent years."