ES in insurance broker Jardine Lloyd Thompson (JLT) jumped more than seven per cent yesterday after one of its biggest shareholders paid £166m to increase its stake.
Conglomerate Jardine Matheson will buy an additional ten per cent of JLT, upping its stake to 40.4 per cent of the fast-growing broker.
The two companies said the deal would maintain JLT’s independence while adding to Matheson’s return on its investment.
“They wanted to support the company and we are delighted to have them,” JLT chief executive Dominic Burke told City A.M.
He said the two firms had been in talks for about a month.
“We are delighted to have found the appropriate level of shareholding for them to take to ensure they are very supportive and also leave the company to continue creating the momentum it has been.”
The agreed cash offer, 765p per share, represents a 23.6 per cent premium to the company’s closing price on Wednesday night.
“Jardine Matheson has been a supportive investor in JLT for many years,” said JLT chairman Geoffrey Howe. “We believe that the partial offer reinforces Jardine Matheson’s long term commitment whilst preserving JLT’s independence.”
Panmure Gordon analyst Barrie Cornes said it was “a vote of confidence in the business but it will remove any bid speculation in the share price.
Growth in Asia and Australia helped JLT post an eight per cent rise in its 2011 half-year profits to £76.4m in July.
MEET THE ADVISER
Leading the advisory team for Jardine Matheson is Crispin Wright, a managing director of Rothschild, who also advises Lloyd's of London insurance underwriters Hardy, airport operator BAA and ferry company P&O. In the past, acting as financial adviser, Wright has fended off takeover bids for both currency printer De La Rue, as Obethur made a £900m bid for the company, and Wolverhampton & Dudley Breweries as they were approached by Pubmaster, a challenging brewery, in 2000. UBS is also advising Jardine Matheson, led by Tim Waddell.
By William Turvill