This article represents the views of its author and not necessarily those of ShareSoc.
Interactive Investor have announced that they are being acquired by Abrdn (fka Aberdeen Standard Life), reportedly for £1.5 billion. Interactive Investor have been providing a popular and low-cost share dealing platform for private investors and have been owned by JC Flowers recently. Interactive acquired The Share Centre a few months back and now have about 400,000 clients.
At least it looks like Interactive Investor clients won’t have to learn their way around a new platform as there is a commitment to keep the business as a separate operating entity with existing management and the same pricing while Abrdn have relatively few direct retail clients. Abrdn are a large fund manager though so no doubt we will see the Interactive Investor platform promoting their funds in due course. But any changes might be of concern to existing Interactive clients.
The comment published in the FT is relevant: “The most successful platforms in recent years have been those independently owned, said David McCann, analyst at Numis. He said creeping bureaucracy, lack of management focus and the worst sin of trying to cross-sell products from the parent group to platform customers amount to very real risks for the success of the tie-up”.
That pretty much sums up my view of the likely benefits or disbenefits of this merger although clearly Abrdn have larger financial resources that might help Interactive Investor in an increasingly competitive platform world. But will large company management really understand the needs of retail investors?
Roger Lawson (Twitter: https://twitter.com/RogerWLawson )
I’m a Antler Holdco (the unlisted holding company of ii) and I have heard nothing officially, not given a vote on the takeover nor details on the purchase of my shares now that Abrdn owns 100% of ii….
I have just been informed (via ii helpdesk who were speaking with their Corporate Actions desk) that the announcement of takeover by Abrdn could be seen as a misinterpretation of “both boards have agreed to the takeover…” This is on the basis that both Abrdn and ii (Antler Holdco = holding company) need to vote on this action and as an Antler Holdco share holder I have not been shown any terms yet!
First the spelling should be abrdn not Abrdn. For reasonably sophisticated investors (I hope I am one) it should not be a problem but for newbies they may well find themselves being pushed into abrdn products some of which are OK but not others. A platform needs to be independent of bias but I cannot believe that abrdn will just treat it as a trade investment. However as long as II maintain their current charging structure Ian not bothered
George: Proper names should ne capitalised. The modern affection to not do this is not something I am going to accept.
II is one of my platforms and not too happy about the takeover
I am a client of ii and until now had not heard about this takeover. I thought at least they might have contacted their clients to keep them updated about current developments
That’s strange, Philip – I am also an ii client and I received an email from ii on 2nd December, advising of the takeover. Maybe their email ended up in your spam? The contents of the email can be read here: http://links.info.ii.co.uk/servlet/MailView?ms=MTY0NjgzNDIS1&r=MTIxNjc2ODYwNjQ5S0&j=MTg5MDI1NDI3OAS2&mt=1&rt=0
Some new is better than no news but I wish I knew what the actual mathematics mean for each Antler Holdco (the ultimate holding company for ii) share…!?! Lets hope the experts can start digesting this news release:
“Pursuant to the SPA, the Initial Sellers have agreed to sell their shares in Antler to abrdn. After the signing of the SPA and before Completion: (i) the Management Sellers have agreed to take certain steps (and the J.C. Flowers Fund and MMC have agreed, if necessary, to invoke their drag rights) to transfer the shares of the other Antler shareholders to abrdn; and (ii) J.C. Flowers and the Management Sellers have agreed to procure that Antler takes certain steps (including, if necessary, by invoking its drag rights) to transfer the c.4.8 per cent. of the shares of interactive investor held by minority shareholders to Antler.
Consideration
The purchase price for 100 per cent. of the Antler shares and all of the c.4.8 per cent. minority shares in interactive investor is £1.49 billion in cash. The purchase price is subject to: (i) a locked box adjustment from 30 September 2021; and (ii) a regulatory capital adjustment, which is equal to two times the difference between the actual minimum regulatory capital requirement as at 31 March 2022 and £48 million. The maximum regulatory capital adjustment (in either direction) will be £20 million. As a result, the total deal consideration will be in the range of £1.47 billion to £1.51 billion.
Antler has outstanding discount notes in issue, which will be redeemed at Completion. The redemption amount will be funded by abrdn and will be deducted from the purchase price to be paid by abrdn at Completion.”
The cash consideration for each Antler Holdco share will be approximately 95% (to allow for purchase of direct ii minority shares) of £1.49bn/number of Antler Holdco shares in issue. You can work this out if you have reports from Antler Holdco telling you how many shares are in issue. Otherwise, had Antler Holdco been a UK registered company, you’d be able to get that information FOC from Companies House. Unfortunately, Antler Holdco is registered in Guernsey, not the UK, so you have to get that information from the “Guernsey Registry”, here: https://www.greg.gg/webCompSearchDetails.aspx?id=NYCLEhVIwdo=&r=0&crn=&cn=antler%20holdco&rad=StartsWith&ck=False – and the Guernsey Registry charge a fee for downloading documents.