Managers at Midas Capital Partners have pledged £20m of their personal cash into the combined managed funds resulting from the forthcoming merger with iimia MitonOptimal(iMO).
The extra investment is being viewed by the Midas team as a strong committment to the upcoming deal.
David Thomas, Midas’ business development head, believes the personal pledge will reassure advisers on the stability of the new Midas Capital entity and its future direction.
“We think we are creating the leading multi-asset business in the UK and both teams are committed to driving the business forward,” he says.
“The board felt it was time to step up a gear and we could not have found a better partner than iimia MitonOptimal with the complementary nature of the fund management businesses.”
Thomas says while there may be some “small overlap” with the funds, the existing managers at both firms will remain at the helm for the foreseeable future.
“It (fund management) is not an area we have looked into too much at the moment," he says.
"We have concentrated most of our efforts into the merger. It’s too early to say what is going to happen, but it is something we will discuss going forward. At the moment it is very much business as usual.”
Thomas did confirm merger talks between the two firms had begun late last year.
iMO will acquire the entire issued share capital of Midas in exchange for the 27,500,129 new ordinary shares, representing about 48% of the enlarged capital. Midas shareholders will collect £59m cash in exchange for the shares.
The cash consideration will be funded through a combination of 7,000,000 new ordinary shares at 150p per share, which will raise £10.5m, and £40m through term loan facilities with the Bank of Scotland and iMO’s existing cash resources.
A general meeting will be held on 6 March, with 55.4% of existing iMO shareholders already indicated their intent to vote in favour of the deal.
The acquisition, classed as a ‘reverse takeover’, is expected to be completed by 6 March.
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