Henderson to rescue Touche from unhappy French liaison
Wednesday 14 October 1992
With pounds 2bn under management, Touche is looking after pounds 800m less now than it was when the French bank paid pounds 48.5m for the firm in April 1989. Touche's results have also deteriorated: it lost pounds 668,000 last year, despite interest receipts of pounds 2.4m.
Paul Manduca, Touche's chairman and chief executive, said poor equity market conditions had meant the SocGen deal had not produced the volume of business that the firm had hoped for. It is understood that the deal with the French bank also cost Touche pounds 500m of business which it had through a link with the Bank of Tokyo.
Henderson intends to finalise the details of its purchase by early November. Andrew Ripper, a Smith New Court analyst, estimated Touche is worth pounds 30m- pounds 32m, at which price it will improve Henderson's earnings.
Mr Ripper said Henderson had been under pressure to find a better use for its pounds 55m cash pile.
The enlarged group will have pounds 9bn under management. Mr Manduca, chairman of the Association of Investment Trust Companies, said it would be the largest investment trust group, with funds of pounds 2.3bn.
Jeremy Edwards, Henderson's managing director, said the group would retain the 'very good' Touche name where appropriate. This is likely to include the 10 TR investment trusts where there is little overlap with Henderson.
The group will have nearly pounds 1bn in unit trusts, which Mr Edwards described as 'good critical mass'.
Mr Manduca is expected to join Henderson in a senior position, probably as Mr Edwards' deputy.
Mr Ripper said the success of the deal 'really depends on how much cost they can strip out'.
Henderson's share price jumped 37p to 655p, though few shares were traded.
View from City Road, page 25
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