M&G Investment Management is pursuing a bid for UK Mortgages on behalf of one of its managed funds, M&G Specialty Finance Fund.
M&G said it had made several approaches to the listed UK Mortgages on behalf of the fund. It said all of the proposals, including the latest one at 67p per share valuing the company at £183m, had been rejected.
UK Mortgages is currently run by Twenty Four Asset Management and has struggled with the hit to interest rates and impact of coronavirus on credit markets.
Last week the shares closed at 55p and surged to 61.7p following M&G’s statement on the details of its proposals.
The fund manager said it “hopes to engage with the UKML board with a goal of securing a recommended transaction”.
“MAGIM believes that the underlying assets held by UKML are complementary to those held by the Fund and will enable it to further build on its track record in acquiring and managing very similar assets in a private setting and is supported by the long-term capital of the Fund it manages,” it said in a statement.
“MAGIM acknowledges UKML’s distinctive strengths, particularly its asset mix of both buy-to-let and owner occupied mortgages, as well as the forward flow agreements.”
It said that it had made the bid public to allow shareholders to decide for themselves on the merit of the possible offer.
M&G Specialty Finance Fund is managed by M&G Investment and was launched in 2018 to allow investors to gain exposure to pools of mortgages and consumer credit.
UK Mortgages today acknowledged the announcement and said it would make a further announcement in due course.