Brewin Dolphin shares fly following £1.6bn RBC Wealth Management bid
The Royal Bank of Canada’s (RBC) wealth management business has offered to buy British investment management heavyweight Brewin Dolphin for £1.6bn.
London-headquartered Brewin will receive 515p per share, which includes an over 60 per cent premium on yesterday’s closing price of 318p. The bid values Brewin at 2.8 per cent of its £55bn assets under management.
Brewin’s directors, who have been advised by Barclays and Lazard, intend to recommend that shareholders vote in favour of the acquisition.
Shares surged more than 60 per cent to 511p per share by mid-morning.
Analysts at Peel Hunt find it difficult to imagine other bidders emerging, though it does “highlight the value in the sector” and would not be the first takeover battle the city has seen.
The bid comes as RBC, which is valued at around £121bn, looks to grow its wealth management operations in Europe, as well as Canada and the US.
“The UK is a key growth market for RBC, and Brewin Dolphin provides us with an exceptional platform to significantly transform our wealth management business in the region,” RCB Wealth Management group head, Doug Guzman said in a statement.
“By combining two highly complementary businesses, we will increase the depth and breadth of our services and position the combined business as a premier integrated wealth management provider to private and institutional clients.”
Robin Beer, the CEO of Brewin Dolphin added: “As part of RBC we would be able to provide our clients with a broader range of products and services, and expand our distribution channels through leveraging RBC’s global presence.
“We share complementary values which emphasise the importance of long-standing client relationships and an inclusive culture supportive of employees and local communities. Our focus will be on maintaining continuity, so that we build on what we have already achieved.”
RBC has “spied an opportunity to gain a foothold in the UK and chisel into new opportunities across the wealth management space”, senior markets and investments analyst at Hargreaves Lansdown, Susannah Streeter said.
“RBC clearly sees Canada, the UK and Europe as broadly aligned in their investment culture, and the bank has spotted significant growth potential in the British market in particular.”