Schroders PLC is poised to leave the London market after its controlling family backed a 612p per share takeover offer from US sector peer Nuveen, in a move that has sparked mixed reactions across the City.
Analyst Rae Maile at Panmure Liberum said a takeover of the 220-year-old firm had always seemed unlikely, but after a long period of share price underperformance "resulting from a prolonged period of poor management and business drift, there were the first signs of a change in the attitude of the family".
He said Nuveen looked to have bagged a good deal after a new management team had started to deliver tangible improvements in the past 15 months, though the price was "a touch ahead" of where he would have pitched a new target price.
"With the offer being recommended the family has clearly decided to move on, but the rest of us will be poorer for it.
"We fear that the offer came too soon in the process of change, and another year of the kind of change seen already in 15 months might have put the share price in a different starting place.”
The deal represents a 34% premium including dividends.
Dan Coatsworth at AJ Bell noted that was below the 44% average premium for bids for UK companies so far this year.
He said: “The Schroders family own approximately 45% of the business and they’ve indicated support for the bid at the current price. What they say goes in this situation.”
Susannah Streeter at Wealth Club said the acquisition shows overseas buyers are still “sniffing out untapped value in UK companies”.
But she said it was “a blow to the London Stock Exchange” as another major name turns private.
"This will go down as a week of huge upheaval for the UK asset management landscape, with this mega deal arriving just as valuations had taken a hit over worries about AI disruption.
"This takeover demonstrates the allure UK assets hold and has helped boost shares in other wealth managers and banks."