Wealth manager Quilter has agreed to buy financial advice firm Lighthouse in a deal worth £46m.
The acquisition would see Quilter, formerly Old Mutual Wealth, add Lighthouse’s 400 advisers to its network.
Lighthouse’s board has accepted the offer of 33p per share – a 25 per cent premium to its closing price on Tuesday – and said the deal could be completed in the second quarter.
The offer – from Quilter's wholly-owned subsidiary Intrinsic – has gained support from investors representing 44 per cent of the Lighthouse shares, the company said.
But the company’s fifth largest shareholder Cavendish Asset Management said the bid did not “adequately value” the growing business.
Fund manager Paul Mumford said Lighthouse could attract better offers from larger firms such as Hargreaves Lansdown, Rathbones or Smith & Williamson.
“We fought off predatory bids in the past when the share price was down at about 3p,” Mumford said.
“This time, though, there must be plenty of other suitors interested in buying the company at a price that reflects the considerable growth potential from its list of blue chip clients, which is likely to grow.”
Shareholders would also still be entitled to the company’s final dividend payment of 2018 announced earlier this year.
Lighthouse chairman Richard Last, who will now defer his proposed departure from the firm until after the deal is completed, insisted it was an attractive proposal for shareholders.
Last added that Lighthouse would benefit from joining the Quilter group and will be better positioned to grow.
Quilter chief executive Paul Feeney said: “At Quilter, our focus is on delivering good client outcomes and that always starts with advice.
“As the advice market consolidates, the strategic acquisition of Lighthouse will help secure Quilter's position as the place to go for trusted financial advice in the UK," he added.