Aberdeen Asset Management is frontrunner to buy Scottish Widows after proposing an all-share offer for the investment manager.
It is understood that Lloyds Banking Group-owned SWIP could be sold for between £400m and £500m, giving Lloyds a 10% stake in Aberdeen, alongside the creation of a “strategic partnership” between the two companies.
A stock market announcement by Aberdeen today confirmed that “it is in discussions with Lloyds Banking Group in relation to a possible acquisition of Scottish Widows Investment Partnership and the formation of a strategic partnership with Lloyds.
“The potential acquisition would add further scale and diversity to the company’s product range, thus complementing organic growth, consistent with the board’s strategy.
“If agreed, the acquisition would be funded through the issuance of new shares in the company to Lloyds and additional deferred payments in cash, conditional on the performance of the partnership over a period of years.
“The proposed transaction would also offer substantial cost efficiencies and synergies. The company would expect any transaction agreed to be materially earnings per share enhancing. It would also reinforce the company’s commitment to a progressive dividend policy and to return surplus capital to shareholders over time.
“There can be no certainty that the discussions will lead to any transaction or any certainty as to the terms on which any such transaction might proceed. Further statements will be made if and when appropriate.”
bridget.oconnell@estatesgazette.com
