Schroders PLC shares jumped 28.5% after the board and controlling family agreed to a £9.9 billion cash takeover by US-based Nuveen in a deal that will create one of the world’s largest active asset managers.
Under the terms of the recommended offer, Schroders shareholders will receive 590p in cash per share, plus permitted dividends of up to 22p, making a total of 612p.
The cash element represents a 29% premium to Wednesday’s closing price and a 55% premium to the 12-month average, representing a level for the shares last seen in 2021.
If dividends are paid in full, the deal values Schroders at about £9.9 billion and implies a multiple of 17 times adjusted operating profit after tax for 2025.
The firm was founded by Johann Heinrich Schröder in 1804 and has remained a family-controlled entity, even after listing in London in 1959.
The Schroders family, which owns 42% of the shares, has given Nuveen irrevocable undertakings to back the deal.
Assuming the deal goes ahead, the enlarged group will manage nearly $2.5 trillion of assets, spanning institutional and wealth channels. The Schroders brand will be retained, with London remaining the largest non-US office.
Schroders chair Dame Elizabeth Corley said the deal will "bring together two successful firms with shared values and highly complementary strengths to create a new global leader in public-to-private investment management" and "will deliver an attractive premium in cash to our shareholders, reflecting the value of our business and its future prospects".
"The board of Schroders is confident that this is the right step for our shareholders, clients and people."
Chief executive Richard Oldfield said: "The transaction will significantly accelerate our growth plans to create a leading public-to-private platform with enhanced geographic reach and a strengthened balance sheet."