Financial services firm James Hay has made a recommended takeover offer for platform Nucleus, changing tack from its original plan of using a scheme of arrangement.
This comes several weeks after International Adviser reported that Nucleus staff were unhappy with the original offer over fears of staff cuts, despite the board of recommending that shareholders accept the £145m ($200m, €165m) proposal.
With a contractual takeover offer, the bidder makes a general offer to target all shareholders. Shareholders are sent a document containing information on the bid and the bidder. A scheme of arrangement, James Hay’s original method of approach, is a formal arrangement between the target company and its shareholders.
A scheme of arrangement deal needs approval of at least 75% of votes cast and is then binding on all shareholders, while a takeover offer must be formally accepted by 50%.
The Nucleus board and majority shareholder Sanlam, which were both in favour of selling, hold more than 50% of the company between them, which is enough to approve the deal.
‘Certainty of execution’
In a London Stock Exchange statement on 30 March, James Hay said that the takeover offer gives “greater certainty of execution” for Nucleus shareholders as it “removes uncertainty in relation to the satisfaction of the requirement for a majority in number of registered members of Nucleus to approve the scheme”.
A spokesperson for James Hay said: “Today we announced our intention to implement our recommended cash offer for Nucleus by way of takeover offer, providing greater certainty of execution for Nucleus’ shareholders.
“We were pleased to note that at the closing of the deadline for registering votes prior to the meeting, 94.93% of the votes that had been submitted in respect of the scheme were in favour and that 44 registered members had voted submitted votes, of which 27 were in favour and 17 were against.
“The combination of the James Hay and Nucleus businesses represents a compelling opportunity to establish a leading independent adviser platform […] with the scale to invest and deliver real value for advisers. We admire much about the Nucleus business and look forward to working with the team to better serve the growing needs of advisers.”
‘Consent’
The Nucleus directors have “provided their consent to the switch to a takeover offer”.
They “believe that switching to a takeover offer will allow all Nucleus shareholders to benefit” and “the terms of the acquisition to be fair and reasonable”.
