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Rensburg Sheppards deal sealed for 188m

Investec’s private client subsidiary Carr Sheppards Crosthwaite is to buy 47.7 per cent of Rensburg’s shares, making the UK’s seventh-biggest private client manager.

The new firm will be called Rensburg Sheppards and will have 10.3bn funds under management.

Investec’s interest in Rensburg was first announced on December 2004 but in January Rathbones made an offer for Rensburg which was rejected. The new Investec offer will lead to fewer shares being issued, with 60m being raised through subordinated debt.

The transaction will see the issue of 25.5 million new Rensburg ordinary shares and a 60m subordinated loan to Investec. Investec will transfer 2.8 million of its consideration shares to an employee benefit trust to be set up for some Carr Sheppards Crosthwaite staff.

The offer is thought to try to allay concerns that Rensburg will lose control to Investec. Based upon the price of 500p per ordinary share for Rensburg,the acquisition values Carr Sheppards Crosthwaite at around 188m.

Carr Sheppards Crosthwaite managing director Stephen Elliot says the transaction will benefit the business by creating value and deepening Sheppards’ presence in the UK.

Rensburg chief executive Michael Burns says: “The clear financial and commercial benefits for all our stakeholders are supported by a strong strategic fit, common vision, shared culture and low-risk integration plan.”

Chelsea Financial Services managing director Darius McDermott says: “This is the culmination of two respected private-client businesses. How it all fits together I’m not sure but it would appear that the synergies between Rensburg and Sheppards are better than between Rensburg and Rathbones. There would have been a big overlap between those two businesses.”

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