River and Mercantile Group (LON: RIV) has seen its shares jump Tuesday after it announced it has entered into a contract for Schroders group to acquire its Solutions business.
The sale of the Solutions business to Schroders is worth £230m. Solutions' current assets under management at 30 September were £42 billion.
The sale price represents a premium of 28.2% over RMG's market capitalisation on 9 August 2021, the day before the announcement by RMG that it had received interest from several parties in Solutions.
“I have been encouraged by the strong interest shown by the bidders and I believe that Schroders is the right choice and represents an excellent owner for the long- term future growth of the business,” said James Barnham, RMG's CEO.
Once the sale is complete, Barham will transfer to lead the business and play a broader management role at Schroders. Alex Hoctor-Duncan will succeed Barham as CEO of RMG.
“I am thrilled to be joining Schroders and the opportunity to build on the exceptional Solutions platform we have developed over the last twenty years. It has been a great honour to lead a simply fantastic business and to work with such incredibly talented people,” added Barnham.
RMG said it will consult with shareholders on how best to use the funds, but it intends to return the majority of the proceeds to shareholders.
River and Mercantile's share price is currently up 18.3% at 279p.
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