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Rathbones back in for Rensburg

Rathbones has re-entered the battle for Rensburg following last week’s reverse takeover bid by Investec’s private-client subsidiary Carr Sheppards Crosthwaite.

Rathbones says it does not intend to improve the revised offer that it made on February 27 – which it believes remains compelling – despite Sheppards’ interest.

Sheppards’ offer to buy 47.7 per cent of Rensburg shares and raise 60m through subordinated debt was welcomed last week by Rensburg chief executive Michael Burns, who said the strong strategic fit and common vision of the two groups was clear.

But Rathbones chairman Mark Powell says its revised and final proposal for Rensburg would create cost savings of 8m a year by 2008 for implementation costs of around 6m compared with Sheppards’ projected figures of 5.5m cost savings and 9m implementation costs.

Rensburg shareholders will vote on Sheppards’ offer at a meeting on April 20.

Rathbones believes its offer provides a full and fair valuation of the Rensburg business, allowing shareholders to realise part of their investment in cash and retain an enhanced participation in the prospects of the enlarged group.

Rathbones chief executive officer Andy Pomfret says: “The Rensburg deal with Sheppards would lead to them losing their independence and effectively end up being controlled by Investec. I do not regard 47 per cent ownership as not having control. The only thing that has changed in Sheppards’ new offer is that they have switched 65m of equity into 60m of debt.

“I think the economics of the bid have got worse. It is a great deal for Investec but not necessarily for Rensburg shareholders. Both sides have now put down their final propositions and shareholders are in a position to choose.”

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