Shares of wealth manager Quilter surge nearly 15% as banking giant NatWest is rumored to be weighing an offer
- Shares rose 14.6 percent, or 15.3 pence, to 120.3 pence after the Mail on Sunday reported that the banking giant was in the early stages of considering a bid for wealth manager FTSE250.
- City sources said private equity firms including CVC, Bain Capital and BC Partners have also shown interest in recent weeks.
Quilter’s shares rose to a two-month high after a report that he was being targeted by NatWest.
Shares rose 14.6 percent, or 15.3 pence, to 120.3 pence after the Mail on Sunday reported that the banking giant was in the early stages of considering a bid for wealth manager FTSE250.
City sources said private equity firms such as CVC, Bain Capital and BC Partners have also shown interest in recent weeks.
Quilter shares jumped to a two-month high after a report that it was being targeted by NatWest
Quilter and NatWest declined to comment. However, if NatWest were to take over the business, it would be the biggest takeover for the lender since it was taken over by taxpayers at the height of the financial crisis with a £46bn bailout.
Quilter, worth nearly £1.5bn, is believed to be one of many wealth management firms that lack the scale and investment to compete with the bigger players in the industry.
Its shares have fallen nearly 37 percent in the past 12 months and are worth 17 percent less than the offering price when it went public in 2018 following the breakup of its parent, financial services firm Old Mutual.
Quilter has moved up NatWest’s list of potential targets as the bank looks to grow its wealth management business. In June, NatWest CEO Alison Rose said the bank had “significant excess capital” and that she would consider an M&A deal that could deliver “compelling shareholder value.”
The bank already owns Coutts, whose clients include the queen, members of the aristocracy and wealthy city professionals. But a deal to buy Quilter would extend these services to middle-class households with more than £100,000 of extra money to invest.
NatWest is also believed to be evaluating other financial services businesses, although plans for these are still in early stages. Predictions of a rush at Quilter came after NatWest forecast last month that its operating profit would hit £1.5bn in the second quarter of this year, a 20 per cent rise from the same period a year earlier. .
A takeover would also be the latest in a series of deals in the asset management industry, with the 230-year-old firm Charles Stanley acquired by US rival Raymond James for £279m last year. In April, Royal Bank of Canada bought London-based Brewin Dolphin for £1.6bn, while Aviva bought Succession Wealth Management for £385m in March.