Minority shareholders yesterday reacted with dismay after Halifax, Britain's biggest mortgage lender, launched a recommended £750m tender offer for 60 per cent of St James's Place Capital, the life insurance group set up by Lord Jacob Rothschild nine years ago.
The deal, which guarantees full autonomy to Sir Mark Weinberg, the chairman, and its existing management team, will leave non-aligned investors holding 30 per cent of the group, putting them at a clear disadvantage to both management, with 8 per cent of the company, and Halifax with its 60 per cent.
"It is a sweetheart deal," one minority shareholder complained yesterday, saying he would have preferred a full bid for the group.
The deal reunites James Crosby, Halifax's chief executive, with his former bosses. Mr Crosby was a founding director with Mike Wilson, St James's Place chief executive, of J Rothschild Assurance, St James's Place's life insurance sales arm. Lord Stevenson, the Halifax chairman, also sits on the St James's Place board as a non-executive director.
The two groups plan to cooperate to launch a new private banking venture this summer using the SJPC brand but products and technology supplied by Halifax's Intelligent Finance internet brand.
The deal removes the long-standing threat of takeover of St James's by Prudential, the life insurance group which had 28 per cent. The Pru agreed on Tuesday night to sell 15.8 per cent of that holding to Halifax.
Eyebrows were also raised by the fact that St James's Place management rewrote options for it and its 1,000 strong salesforce before the deal was announced, giving them an extra £1 a share over and above the £3 shareholders who successfully tender will get for their shares. The options, if excerised, would be equivalent to a further 8 per cent of the group.
Halifax shares ended 8p higher 686p, while St James's added 22p at 252p.Reuse content