Henderson has this morning announced it has agreed to acquire New Star Asset Management for £115m.
The offer will be 2p in cash for each New Star ordinary share, which values the entire issued and to be issued ordinary share capital the John Duffield-led firm post-completion of its bank restructuring at approximately £21.6m.
Existing New Star ordinary shareholders will receive approximately £5.4m and Henderson will part finance the purchase by placing up to 72.3m in new shares to investors, representing approximately 9.9% of its existing issued ordinary shares.
The offer is conditional upon completion of New Star's restructuring, acceptances by 90% or more of New Star ordinary shareholders being received under the offer and the approval of Henderson shareholders and relevant regulators.
Duffield and a number of New Star managers with a stake in the firm have given irrevocable undertakings to vote in favor of the deal, representing 24.95% of New Star's ordinary shares.
Franklin Templeton has given a non-binding letter of intent for its 10.96% stake.
Duffield, Howard Covington and New Star non-executive directors intend to leave the firm once the Henderson offer is declared wholly unconditional.
The other directors of New Star, including Richard Pease, intend to remain with the enlarged Henderson Group following the completion of the deal, "at least for a transitional period".
Henderson says it work with the New Star group during the transitional period to ensure retention of key employees.
At 26 January, New Star had £10bn in assets under management, down from approximately £13bn on 13 November 2008. Henderson had £49.5bn in AUM at the end of last year.
"Whilst New Star's AUM have significantly reduced during 2008 as a result of market movements and client redemptions, the Henderson board believes that, under Henderson's ownership, this portfolio of funds and mandates should stabilise by removing the corporate uncertainty that is currently affecting New Star's business," the offer statement reads.
"Over the medium term, the combination is expected to enhance substantially the growth potential of Henderson's retail and institutional businesses."
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