A wealth of questions stalls a merger of money managers
HOW much trouble is the £625 million merger of money managers Tilney and Smith & Williamson in? It’s hard to be sure, but some, plainly.
A little noticed announcement in Canada throws awkward light on the situation. AGF, a shareholder in S&W, felt obliged to tell its own investors the following: “The Financial Conduct Authority informed Tilney that the….. merger has not met with its approval.”
The FCA hasn’t said anything officially, and since neither Tilney nor S&W are listed, there was no release to the stock exchange here. Still, if you were one of the savers with some of the £45 billion in assets the combined group expects to manage, you might like to be told. When the merger was announced last September, Tilney chief Chris Woodhouse said this was a “transformational deal, which will create a truly unique business”.
The City remembers Woodhouse as the finance director who helped float Debenhams in 2006 at a value of £1.2 billion. The change in the department store’s fortunes since then? Transformational.
Tilney says that it is in “ongoing dialogue with the FCA”. About what? “We aren’t able to comment further.” In which case, let’s speculate. A merger of this sort is always an IT nightmare. The chairman of Tilney, Will Samuel, was formerly the chair of TSB and held at least partly responsible for that bank’s total computer meltdown.
He will be chair of the merged group, if it happens. Perhaps the FCA is looking at that disaster and telling Samuel and co that the merged Tilney/S&W needs to put more capital aside before any deal can go ahead. Is that enough to kill the merger? Tilney says: “The FCA have raised a number of issues with the deal as is
currently structured and therefore we are in discussions to understand these and determine what revisions to the transaction might be required. Both Tilney and Smith & Williamson are fully committed to the merger given the compelling strategic rationale.”
A number of issues? How many? Clarification needed quickly, I’d say.
