View more on these topics

Shareholders R Us

When Premier Asset Management chief executive Mike O’Shea spoke about the board’s decision to accept a £51.9m management buyout of the business he could hardly have envisaged the way events would have panned out over the next few weeks.

At that time all seemed rosy as the group’s management looked to follow in Gartmore and Jupiter’s own footsteps and ensure that they had control of their own destiny by pairing up with private equity firm in the shape of Electra Partners.

At the time O’Shea said one of the biggest reasons behind the decision was that the group needed to have the autonomy and the ability to fend of bids from other quarters, particularly as most businesses are at the whim of the equity markets should they decide to fall.

Less than a month later and O’Shea’s foresight could put Nostradamus to shame, for not only have shareholders decided against the MBO by the time of the firm’s initial deadline, but also the equity markets have decided to tank to the point that they are putting pressure on the glass ceiling that is 6,000 on the FTSE100.

Worse still, only 40.47 per cent of shareholders voted in favour of the MBO, less than half of the 90 per cent majority the group had initially sought, while opposition from shareholders, including Water Hall Group and Unicorn Asset Management’s Peter Webb, who owns 9.5 per cent in the Eaglet Investment Trust, have made their discontent, and subsequent opposition to the move, known to the public.

Where does this go from here? Well Premier has issued a secondary deadline for shareholders, while it is understood that the majority shareholding is likely to drop from 90 per cent to between 70 and 75 per cent.

However, O’Shea’s fears must now be becoming a reality if he truly believes the firm could be at risk from falling markets. Prior to the shareholder vote on Monday, he said: “The level of merger and acquisition business going on in the financial services sector was concerning management.

“The asset management industry is cyclical so there is a certain dependency on the performance of the equity markets and, to an extent, we are at the behest of them, especially if markets struggle and we become subject to a takeover.”

Premier will undoubtedly want this sorted out quickly. As for those who oppose, they have their own agenda and could spark a rival bid.

If that is the case and the managers do not get their they may make their decision and vote with their feet.

Recommended

FTSE makes minor recovery

The FTSE clawed its way back over 5900 this morning on the back of US speculation that the Federal Reserve is to cut interest rates following heavy losses in the past few days.

Employers concerned at effects of age legislation

Half of employers believe that anti-age discrimination legislation makes employee benefits such as life cover, income protection and private medical insurance less sustainable in the future.Consultancy Watson Wyatt recently surveyed 130 UK companies and found that 50 per cent believe the Employment Equality (Age) Regulations Act 2006 is threatening the future of protection insurance in […]

NU set to cut pension charges as sales slide

Norwich Union has seen individual pension sales slump following a repricing last year and admits it may have to cut its charges if it wants to maintain market share.Parent group Aviva’s int-erim results show that worldwide sales rose by 25 per cent to £19.2bn in the first six months of 2007 compared with £15.6bn in […]

Sants to speak at Aifa Annual Dinner

New FSA chief executive Hector Sants will be the main speaker at this year’s Aifa Annual Dinner.Aifa director general Chris Cummings says Sants’ agreement to speak at the dinner is a sign of his commitment to work with the trade body over the Retail Distribution Review to ensure the best outcome for consumers and the […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com