Charles Stanley gives up almost 200 years of independence

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At the time of the Big Bang in the City in 1983 it was widely expected that the Square Mile’s venerable names would be gobbled up by international competitors, and 38 years it is still happening.


Wealth management firm Charles Stanley (LSE:CAY) Group PLC is the latest to voluntarily give up its independence. The board recommends shareholders accept a bid from US rival Raymond James (NYSE:RJF) of 515p per share.


Shares in Charles Stanley, which was established in 1792, were up 43% at 515p following the announcement of the agreed bid, placing a value of GBP279mln on the UK company.


“Raymond James has long admired Charles Stanley’s reputation, heritage and its talented pool of investment managers, financial planners (collectively referred to as wealth managers) and professionals.,” the US firm said.


“The two firms share a common client-centric approach and both offer employed and self-employed affiliation models, while Raymond James also provides platform services, enabling the flexibility that wealth managers value. Charles Stanley meets Raymond James’s historical acquisition criteria, in particular as an excellent strategic fit with a complementary culture,” the stock market announcement from Raymond James continued.


Charles Stanley would add about GBP27.1bn in client assets, bringing Raymond James’s total client assets in the UK to more than GBP40bn.


Directors of Charles Stanley accounting for about 14.7% of the company’s shares have agreed to accept the offer while shareholders representing a further 19.8% of the shares have either agreed to vote in favour of the takeover or have indicated they will do so; thus, with around 34.5% of the votes in the bag, this one looks like a done deal barring a counter offer.


“Raymond James will seek to leverage the respective strengths of Charles Stanley and Raymond James through further investment in technology, infrastructure and back-office partnerships to enhance the firms’ already strong offering in wealth management,” declared Paul Reilly, the chief executive officer of Raymond James.


Paul Abberley, Reilly’s counterpart at Charles Stanley, said the board believes the terms from the US company represent fair value.


Once famous names in the City that have disappeared or have been subsumed into foreign firms include Hoare Govett, Cazenove, Warburg, Morgan Grenfell, Hambros and Philips & Drew.


From BRITISH BANKS' ROLE IN UK CAPITAL MARKETS SINCE THE BIG BANG by Philip Hablutzel in 1992


From British Banks’ Role in UK Capital Markets since the Big Bang by Philip Hablutzel in 1992

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