» » Brooks Macdonald In Deal To Buy Rival Braemar Group – Update

Brooks Macdonald In Deal To Buy Rival Braemar Group – Update

(RTTNews) – Integrated wealth management company Brooks Macdonald Group Plc (BRK.L) Tuesday said it has recommended a cash offer to acquire investment funds and property manager Braemar Group Plc for about ?4 million. Brooks Macdonald added that its board, Braemar Management, and the Braemar Independent Director reached an agreement on the terms of the offer.

Braemar’s Independent Director considered the offer to be fair and reasonable and recommends to its shareholders that they accept the offer, as he has irrevocably undertaken to do in respect of his own beneficial shareholding.

As per the offer, Braemar would get 2.25 pence in cash for each of its ordinary share. The offer represents a premium of about 63.6% to its yesterday’s closing price of 1.375 pence per ordinary share and approximately 58.6% to the average closing price of 1.419 pence an ordinary share for the six months ended June 7.

Brooks Macdonald has also entered into a management share purchase deal to purchase all shares in Braemar held by Braemar Management, representing about 28% of the existing issued ordinary shares.

Brooks Macdonald said the offer will be conditional, inter alia, upon valid acceptances being received in respect of not less than 90%, or such lower percentage, not less than 50%, in nominal value of the ordinary shares to which the offer will relate.

Commenting on the offer, Chief Executive of Brooks Macdonald Chris Macdonald said, “Braemar has a strong management team, fund management range and property management business which will complement Brooks Macdonald’s existing offering and is in keeping with Brooks Macdonald’s strategy of expanding its niche range of funds.”

Brooks Macdonald, which had a market capitalisation of about ?79 million as of June 7, expects the acquisition will significantly strengthen its scale and distribution in the UK retail fund management market and fits with its strategy of expanding its niche range of funds.

As per the deal, Braemar Independent Director has agreed to resign from the Board of Braemar on the offer becoming or being declared unconditional in all respects, while Brooks Macdonald’s directors, Simon Jackson and Christopher Macdonald, will join the boards of Braemar, Braemar Securities and Braemar Estates.

Braemar, which operates through its two core divisions, Braemar Securities and Braemar Estates, reported revenues of ?2.6 million for the year ended March 31, 2010. The company, which founded in 2001, which has its head office in Hale, Cheshire, together with property management operations in Manchester and Reading, had a market capitalisation of approximately ?2.4 million as at June 7, 2010 and has approximately 34 employees.

In Monday’s regular trading session, BRK closed trading at 774.00 pence per share on the London Stock Exchange.

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