Silver lining for Liontrust as falling share price cuts £50m from Majedie takeover


Liontrust’s acquisition of Majedie Asset Management will be vastly understated when it closes on April 1, after the FTSE 250 group of funds’ share price plummeted in the months following the announcement of the OK.

On December 7, Liontrust announced that it would pay a maximum of £120 million for its rival, comprising a share issue worth up to £97 million plus £23 million in cash paid to shareholders.

On the day the deal was unveiled, its price closed at £23 per share. On March 29, it opened at £12.42, down 46%.

The disputed performance means the issue of 3.68m new shares will be significantly under budget at £45.6m, representing an effective cost saving of £51.4m.

See also: Majedie’s value fell 19% before Liontrust deal

A Liontrust spokesperson confirmed portfolio advisor that there is no change to the cash payment of £23 million to be paid to Majedie shareholders.

Upon completion, Liontrust’s share capital will consist of 64.9 million common shares with voting rights.

Obvious overlap in UK funds

After buying the UK businesses of Neptune and Architas in recent years, Majedie’s acquisition by Liontrust came as a surprise as it hadn’t been touted as a potential takeover target, AJ Bell’s Ryan Hughes told Reuters. ‘era.

The deal has not been without its critics, however, particularly regarding the “obvious overlap” of UK funds and what that means for investors in Majedie’s three UK-focused strategies, all of whom have experienced takeovers since the announcement of the agreement.

Majedie AM Fund Size as of February 22 Size as of December 21
UK stocks £894m £949.9m
Focus UK £399m £522 million
Returned to UK £64 million £70.8 million

From April, these strategies will be housed alongside Anthony Cross and Julian Frosh’s range at Liontrust, which includes the £5.7bn Special Situations Fund and the £1.4bn sterling for UK small businesses.

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