Lloyds Banking Group PLC (LON:LLOY) said today it has sold its remaining stake in Standard Life Aberdeen PLC (LON:SLA), with the move coming around a month after the merged fund manager revealed it is to contest the lender’s decision to pull £109bn of assets under management from it.
In a short statement, the FTSE 100-listed bank said the shares sold, representing approximately 3.3% of Standard Life Aberdeen’s issued ordinary share capital, were sold at a price of 352.5p each and raised aggregate gross sale proceeds of £344mln. SLA shares were down 3.6% to 351p in early trading on Friday,, while Lloyds shed 0.6% at 63.24p.
READ: Standard Life Aberdeen contests Lloyds' decision to pull £109bn in funds
Lloyds added that there is no impact on its Income Statement as the investment has been accounted for at fair value through other comprehensive income.
The bank announced in February that it was terminating SLA’s contract to manage its Scottish Windows portfolio, saying the merger of Standard Life and Aberdeen raised competition concerns.
Last month, SLA said it does not agree with Lloyds’ reason for ending their deal and that it had no right to do so, adding that it was in talks to try to resolve the dispute with the bank.
The contract to manage the assets was part of Aberdeen’s £650mln acquisition of the asset management unit of Scottish Widows from Lloyds in 2014.
The deal is worth £129mln in annual revenue to SLA, or 4.4% of its proforma 2017 revenue.
It included a clause that allowed Lloyds to end the deal in the event Aberdeen was subject to a change of control with a "material competitor".
Second blow
Russ Mould, investment director at AJ Bell commented: “Asset manager Standard Life Aberdeen has been struck a second blow by Lloyds Banking Group, suggesting their relationship is no longer an amicable one.
“Having lost a contract in February to managed Lloyds’s £109bn Scottish Widows portfolio, Standard Life Aberdeen has now lost Lloyds as a major shareholder after the bank sold its 3.3% stake in the business.”
He added: “The decision by Standard Life Aberdeen last month to launch a contract dispute process over the Scottish Widows deal is likely to have angered Lloyds. Indeed, the latter has said it was disappointed by comments from the asset manager.
“This disagreement will no doubt have influenced Lloyds’ decision to withdraw its money invested in Standard Life Aberdeen.”
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