LONDON, Feb 19 (Reuters) - Nuveen's agreed 9.9 billion pounds ($13.3 billion) takeover of Schroders undervalues the British money manager, shareholder J O Hambro said on Thursday, as the companies
Nuveen's Acquisition of Schroders Faces Valuation Criticism
By Iain Withers
LONDON, Feb 19 (Reuters) - Nuveen's 9.9 billion pound ($13.3 billion) deal to buy Schroders undervalues the UK money manager, Schroders shareholder J O Hambro said on Thursday, as one of the company's other investors Tikehau Capital confirmed it had sold out.
Schroders' Sale to Nuveen
Schroders said last Thursday it intended to sell up to its U.S. rival and end more than 220 years of independence. The founding Schroder family - which still owns 42% of the company - has agreed to back the deal, leaving Nuveen and Schroders executives to persuade other shareholders to follow suit.
J O Hambro, which owns about a 0.5% stake in Schroders and is a top 25 shareholder according to LSEG data, said in a statement that it believed Nuveen's valuation of the firm was 10-15% below fair value. It declined to comment when asked if it would support the deal on its current terms.
One of Schroders' largest shareholders until last week, French asset manager Tikehau Capital, separately said after its earnings on Thursday that it had sold all of its stake in the London firm, which had once been as high as 5.4%, for a 240 million euro ($282 million) profit.
Reactions from Major Shareholders
“After the announcement we decided to sell," Antoine Flamarion, co-founder of Tikehau, told reporters. "We exited everything. Right or wrong, we see the (sale) agreement as firm.”
Morningstar analysts have speculated that Schroders' remaining shareholders could hold out for a higher offer.
Another of Schroders' previously largest backers, Harris Associates, has also sold its shares, a spokesperson confirmed, without clarifying when the shares were sold.
Market Valuation Perspectives
Schroders declined to comment, but has previously said the deal - at about 17 times earnings - represents good value for shareholders. Nuveen was not immediately available for comment.
James Lowen and Clive Beagles, portfolio managers at J O Hambro, said the deal highlighted the "degree of undervaluation" across the UK market.
The deal between Schroders and Nuveen will create a combined group with $2.5 trillion of assets under management.
($1 = 0.7422 pounds) ($1 = 0.8499 euros)
(Reporting by Iain Withers. Editing by Tommy Reggiori Wilkes and Mark Potter)
