Sanlam UK, the JSE-listed financial services group's indirectly held subsidiary, indicated yesterday that it would back the almost R3 billion deal between James Hay Holdings and Nucleus Financial Group. Photo: David Ritchie/African News Agency (ANA)
Sanlam UK, the JSE-listed financial services group's indirectly held subsidiary, indicated yesterday that it would back the almost R3 billion deal between James Hay Holdings and Nucleus Financial Group. Photo: David Ritchie/African News Agency (ANA)

Sanlam UK backs landmark R3 billion transaction

By Sandile Mchunu Time of article published Feb 10, 2021

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JOHANNESBURG - SANLAM UK, the JSE-listed financial services group's indirectly held subsidiary, indicated yesterday that it would back the £144.62 million (almost R3 billion) deal between James Hay Holdings and investment platform business Nucleus Financial Group.

This comes after Nucleus said it had reached an agreement for an allcash offer by James Hay Holdings for an offer of 188 pence per Nucleus share, which represents a premium of roughly 41.89 percent to the closing price per Nucleus share of 132.5p on December 1, 2020, being the last business day before the commencement of the offer period.

Sanlam UK holds 39.91 million shares in Nucleus, which represents about 52.19 percent of Nucleus' issued share capital as at February 8.

“Sanlam UK has given an irrevocable undertaking to vote in favour of the acquisition. Sanlam UK is an indirectly held subsidiary of Sanlam. Should the acquisition complete, Sanlam UK will receive approximately £75m in cash,” Sanlam UK said.

James Hay's chances were also boosted by the board of Nucleus, which advised its shareholders to support the deal.

Nucleus chief executive David Ferguson said becoming part of the enlarged group gave them a key role in a much bigger story where they can create a leading independent platform of scale with a high-tech, high-touch proposition and philosophy.

“I think the combination of our people's talents and the size of the opportunity can see us carefully navigate the roadmap to deliver on this collective medium-term goal. Since we launched in 2006 we have always put the customer centre stage and while that has made us a little bit different, it has carried us to £17.4bn in AUA (assets under administration) and to a point where the sentiment of our users and our people has never been better,” Ferguson said.

The merger of James Hay and Nucleus will lead to a creation of one of the UK's largest independent adviser platforms with a total of £45bn in AUA. However, the acquisition is still subject to Nucleus shareholder and Financial Conduct Authority approval and other regulatory approvals.

The transaction is expected to complete in the second quarter of this year.

James Hay chief executive Richard Rowney said the firm was excited to be announcing the creation of one of the leading independent adviser platforms, and the two businesses had complementary areas of expertise and common beliefs about the importance of independence and only serving the adviser market.

“We admire much about Nucleus and the skills within its team, and look forward to working with them to better serve the growing needs of advisers. By joining forces, we can combine Nucleus' reputation for great digital user-experience and James Hay's pension specialism, creating greater strength and a platform with the scale to invest and deliver real value for advisers and their clients,” Rowney said.

Sanlam's JSE share price rose 1.65 percent yesterday to close at R62.34.

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