The board of Cazenove Capital said it unanimously recommended the deal to its shareholders, who are expected to receive the formal offer documents in the second half of April.
In addition, five key director’s on Cazenove’s board, including CEO Andrew Ross, have signed deeds of irrevocable undertaking – binding agreements to accept the takeover, which are designed to provide assurance they will not stand in the way of the acquisition taking place.
Victoria Hayes, head of marketing and A spokesperson for Cazenove Capital said the whole transition was expected to be wound up by the end of Q2, while integration of the two businesses is predicted to take up to 12 months by Schroders’ managing director of UK intermediary, Robin Stoakley.
Under the recommended offer, Chris Rice’s pan-European equity team, Marcus Brooke’s multi-manager team and Peter Harvey’s fixed income team will move over in their entirety to the combined business. In due course the branding of these funds will be changed to Schroders, but the investment processes and objectives are envisaged to stay the same.
Meanwhile, the private banking arm of Cazenove will keep its branding in a combined private banking and wealth management business expected to hold £28.4bn, using December 2012 figures.
Andrew Ross will be head of UK private banking, reporting to Philip Mallinckrodt, Schroders group head of private banking.
Fall out
Cazenove’s investment funds business will add £5.1bn of AUM to Schroders, bringing Schroders total AUM to approximately £229.2bn.
The Schroder UK Alpha Plus Fund, soon to be without Buxton at the helm, has £3.4bn in AUM, to put the size of Cazenove’s funds proposition into context.
According to Hayes, 95% of Cazenove is employee or former-employee owned and no individual shareholder owns more than a 2.75% stake.
In order for the deal to go through 75% of shareholders must agree with the proposal, which will see them bag 135p per ordinary share.
Although no fund managers will lose their jobs, the two companies admitted there would be some duplication in support, marketing and sales divisions.
Schroders estimated cost-savings of £12m to £15m could be saved by streamlining these “synergies”.
