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£60M cost of Thinc missing target

Former Thinc Destini shareholders will not receive their share of a £60m deferred payment from Axa after it failed to hit performance targets.

In October 2006, Axa’s Advisory Services arm, now called Bluefin, bought Thinc for total £100m, including a £10m initial payment, £30m to restructure debts and £60m deferred based on the firm’s performance in 2009.

Grant Thornton has declared that the 2009 targets were not reached, meaning the deferred payment will not be made.

On October 5, Money Marketing revealed that Bluefin had made a £62m writedown for 2009 due to costs relating to its restructure, which included cutting staff from 180 to 50.

This came on top of impairment charges of £40m in 2008, also attributed to a restructure of its private client business.

Thinc was majority-owned by its directors. Other shareholders included Hbos, now owned by Lloyds Banking Group, and Friends Provident.

Some of the directors, including former chief executive Simon Chamberlain who left in July 2007, gave up their rights to any deferred payments when they left the firm.

A Bluefin spokesman says: “Market conditions and the regulatory environment, for example, the mortgage market, which could not have been anticipated in 2006 has had an impact on the Bluefin Advisory Services group of companies and its clients. This was a major factor in the financial performance of the business in 2009.”

Axa relaunched the Thinc business as fee-based Bluefin Advisory Services in January 2009 after launching an aggressive acquisition strategy that saw it buy a number of small firms.

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