Investec expects the Rathbones share merger to close this year

(Alliance News) – The merger between Investec Plc and its unit Investec Wealth & Investments Ltd and Rathbones Group Plc is expected to be completed this year.

Sandton, a Johannesburg-based financial services firm, said Rathbone’s shareholders had approved the merger at its general meeting on Friday.

The company said the proposed deal is expected to close in late Q3 or early Q4.

The merger is subject to certain regulatory approvals, the group said.

Investec W&I UK and Rathbones first announced plans to merge in early April to create one of the UK’s largest asset managers.

Investec W&I UK comprises Investec’s wealth and investment business in the United Kingdom and the Channel Islands, but excludes Investec Bank AG and Investec Wealth & Investment International (Pty) Ltd, both of which remain wholly owned subsidiaries of Investec.

The merger will create a UK asset manager with around GBP 100 billion of funds under management and administration.

The enlarged Rathbones will be an independent publicly traded company operating under the Rathbones brand name in London, with Investec as a long-term strategic partner. The company will continue to be led by Rathbones Chairman Clive Bannister and CEO Paul Stockton.

Under the terms of the transaction, new voting and non-voting shares of Rathbones will be issued in exchange for 100% of the share capital of Investec W&I UK.

Upon completion of the transaction, Investec will have a 41.25% economic interest in the enlarged share capital of Rathbones, but only 29.9% of its voting rights. Investec will convert voting common stock and non-voting convertible common stock into common stock on a 1-for-1 basis.

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Rathbones’ existing shareholders will have 58.75% economic interest and 70.1% voting rights. The terms of the combination represent an equity value of approximately GBP839 million for Investec W&I UK.

Shares in Rathbone were down 0.5% at 1,839.48 pence in London on Friday. Investec shares fell 1.7% to 436.20 pence in London. In Johannesburg they lost 0.9% at ZAR103.69.

By Ordwell Dlamini, correspondent for Alliance News

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