Old Mutual-M.JohnstoneReplace
Old Mutual PLC
11 October 2000
The issuer has advised that minor typographical amendments have been made to the
contact details in the Old Mutual - M.Johnstone Sale announcement released today
at 07:22 under RNS No 3369S.
The full corrected version is shown below.
OLD MUTUAL PLC
REPLACEMENT FOR PREVIOUS ANNOUNCEMENT THIS MORNING
OLD MUTUAL AND ABERDEEN ANNOUNCE THE MERGER BETWEEN
ABERDEEN AND MURRAY JOHNSTONE TO FORM THE LARGEST
INDEPENDENTLY OWNED FUND MANAGER IN SCOTLAND
Introduction
The Boards of Old Mutual PLC ('Old Mutual') and Aberdeen
Asset Management PLC ('Aberdeen Asset Management' or
'Aberdeen') announce that they have signed a binding
agreement on the terms of the sale by Old Mutual of
Murray Johnstone Holdings Limited ('Murray Johnstone') to
Aberdeen to create Scotland's largest independent fund
management business with over £27 billion in funds under
management. The transaction involves a payment of total
consideration to Old Mutual of approximately £150
million, comprising £133.5 million for goodwill and net
assets of approximately £16.5 million.
Shareholder approval
Due to the relative sizes of Murray Johnstone and
Aberdeen the transaction will require the passing of an
ordinary resolution by Aberdeen shareholders. A circular
will be dispatched to Aberdeen's shareholders, as soon as
practicable, convening an Extraordinary General Meeting to
approve the merger. Shareholders representing
approximately 59.13 per cent. of Aberdeen's issued share
capital have confirmed that they will vote in favour of
the transaction.
Consideration
Consideration of approximately £150 million will be
payable to Old Mutual on completion of the transaction.
The total consideration payable will depend on the final
net asset position of Murray Johnstone at completion.
The consideration will be financed from Aberdeen's own
cash resources and bank borrowings which have been
arranged specifically for the purpose of the transaction.
Strategic rationale of the merger for Aberdeen
The merger of Aberdeen and Murray Johnstone represents an
excellent opportunity for Aberdeen to significantly
strengthen its presence in a number of core business
areas and to develop complementary new businesses.
The acquisition will increase Aberdeen's funds under
management by over 17 per cent. from around £23.3 billion
(including approximately £1.5 billion from the recently
announced acquisition of Barclays Property Investment
Limited) to approximately £27.3 billion (based on funds
under management as at 30 September 2000 for both Murray
Johnstone and Aberdeen).
The board of Aberdeen expects the transaction to be
earnings enhancing in the current year, before the
amortisation of goodwill and exceptional charges.
Strategic rationale for Old Mutual's sale of Murray
Johnstone and the merger with Aberdeen.
Prior to the announcement of its tender offer for United
Asset Management Corporation ('UAM') Old Mutual carried
out a strategic review of Murray Johnstone with UAM and
decided that the creation of a distinct asset management
capability in Glasgow did not add value to Old Mutual's
asset management business in the UK.
In addition the senior management of Murray Johnstone and
UAM had been reviewing the ownership structure of Murray
Johnstone for some time. During the course of the summer
Murray Johnstone entered into discussions with a number
of parties to identify a suitable partner to develop the
business to its full potential.
The merger with Aberdeen represents a significant
opportunity for Murray Johnstone to develop its areas of
strength, notably in the investment trust sector, private
equity and internationally, with a partner equally
committed to the development of these business areas.
Benefits of the merger.
The Boards of Aberdeen and Murray Johnstone firmly
believe that the merger represents a major commercial
opportunity to create a business which will allow the
enlarged group to become one of the largest independently
owned fund management businesses in the UK.
The enlarged group and its clients are expected to
benefit from:
' being ranked fourth in the UK investment trust
market;
' being a leading provider of open-ended
funds in the UK;
' the acceleration of the achievement of
Aberdeen's aspirations to develop its international
client base;
' access to a leading regionally focussed private
equity business;
' significant potential for revenue growth through
access to Aberdeen's IFA distribution network and the
existing customer bases of both businesses;
' a combination of the complementary expertise of both
organisations which will create a greater pool of skills
in the enlarged company; and
' the benefits of scale available from a combination
of both businesses and the cost savings from combining
certain of the enlarged group's operations.
Management, infrastructure and locations
Senior management of Murray Johnstone
will be offered continuing roles within
the enlarged group. Giles Weaver, Chairman
of Murray Johnstone, will be invited to
join the board of Aberdeen as a non-
executive director. David MacLellan, Managing
Director of Murray Johnstone, will also be
invited to join the board of Aberdeen.
Aberdeen intends to build a substantial business
in Glasgow of which Murray Johnstone's business
will form the core. Murray Johnstone's
private equity business will continue to operate
its regional network of offices in the UK.
The name Murray Johnstone will be retained
for Murray Johnstone's existing investment
trusts and other business areas as appropriate.
Conditions
The merger is subject to, inter
alia, the following conditions:
' Aberdeen shareholders approving
the necessary resolutions for the approval of
the transaction at the Extraordinary General Meeting;
and
' approval from the relevant regulatory authorities in
the countries in which Murray Johnstone operates.
Financial information relating to
Murray Johnstone Murray Johnstone
reported profit before taxation of
£5.3 million for the year ended 31
December 1999 (1998: £6.5 million)
and net assets of £16.8 million
as at 31 December 1999. Commenting on
the transaction, Eric Anstee,
Chief Executive Financial
Services, Old Mutual, said:
'Following the completion of the
UAM transaction, we are all
pleased to have swiftly concluded
this deal at a good price which
will be accretive for our
shareholders.'
Martin Gilbert, Chief Executive
of Aberdeen, said:
'This merger with Murray
Johnstone, whose business is so
complementary to our own, is
another major step forward in
the development of Aberdeen. We
anticipate significant potential for
revenue growth from a merger
which gives us the unique
opportunity in a single step to
elevate us to fourth position in
investment trusts and the top
tier in open ended funds. It
gives an excellent platform to
develop an international
private equity business,
enhances our distribution in
North America and gives an
entree into the growing market
for Socially Responsible
Investment. Furthermore,
Aberdeen has a track record
of making mergers and
acquisitions work and this is
particularly highlighted by
the merger with Prolific in
September 1997.'
David MacLellan, Managing
Director of Murray Johnstone
said:
'Aberdeen has developed a
substantial business over the
last few years and the
commercial logic for a
combination of our businesses is
very strong.
All areas of Murray Johnstone's
business will, I believe,
benefit from this merger and we
look forward to working with
our new colleagues for the
benefit of our clients.'
11 October 2000
ENQUIRIES
Old Mutual 020 7569 0100
Eric Anstee
Murray Johnstone 0141 226 3131
David MacLellan
UAM 001 617 330 8900
Franklin Kettle
Donaldson, Lufkin & Jenrette
020 7655 7000
Malik Karim
College Hill (for Old Mutual)
0207 457 2020
Nicholas Williams
Lansons (for Murray Johnstone)
020 7490 8828
Henrietta Guthrie
Aberdeen Asset Management
01224 6 31 999
Martin Gilbert
Intelli Corporate Finance
020 7653 6300
Gordon Neilly
Penrose Financial
020 7776 7605
Louise Hatch
Donaldson, Lufkin & Jenrette
International, which is
regulated in the United Kingdom by the
Securities and Futures Authority Limited,
is acting exclusively for Old Mutual and
for no one else in connection to this
transaction and will not be responsible to
anyone other than Old Mutual for providing
the protections afforded to customers of
Donaldson, Lufkin & Jenrette International.
Intelli Corporate Finance Limited, which is
regulated in the United Kingdom by the
Securities and Futures Authority Limited,
is acting exclusively for Aberdeen and for
no one else in connection to this
transaction and will not be responsible to
anyone other than Aberdeen for providing
the protections afforded to customers
of Intelli Corporate Finance Limited.
INFORMATION FOR EDITORS
Aberdeen Asset Management
Aberdeen Asset Management is a
leading independently owned UK based
investment management business based
in London and Aberdeen. Aberdeen
manages funds for a number of large
institutions together with a wide
range of unit trusts, investment
trusts, ISAs, pension funds and offshore
funds for institutions and private investors.
Aberdeen manages investments in excess of £23 billion
and is quoted on both the London and
Singapore stock exchanges with a market
capitalisation of approximately £890 million.
Murray Johnstone
Murray Johnstone is a leading UK-based
investment management business based in
Glasgow, Scotland with five other offices
in the UK as well as international offices in
Chicago, Bahrain and Singapore.
As at 30 June 2000, Murray
Johnstone had funds under management of
approximately £4.2 billion and 241 full-time
employees, including 40 investment
professionals.
Old Mutual
Old Mutual is a leading
financial services group in
southern Africa. In the UK, Old
Mutual owns the merged group
of Gerrard and Capel Cure Sharp
and Old Mutual Securities, the recently merged
institutional broking and corporate finance
businesses of Albert E Sharp Securities and
Greig Middleton. It has also recently
completed the acquisition of Murray
Johnstone's parent company, United Asset
Management Corporation in the USA. Old Mutual
is listed on the London Stock Exchange and
has a market capitalisation of
approximately £5.9 billion.
United Asset Management Corporation
UAM is one of the largest investment
management organisations in the world,
providing a range of investment management
services to institutions, mutual funds and
high net worth investors. These services are
offered through a diverse group of operating firms
that managed over $195 billion for clients
throughout North America and the rest of the world
as at 30 June 2000.
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