Murray Johnstone falls to Aberdeen's £150m offer

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The Independent Online

Aberdeen, the asset management group, has shored itself up against the potential loss of a £10bn account by buying Murray Johnstone in a deal that makes it Scotland's biggest independent fund manager.

Aberdeen, the asset management group, has shored itself up against the potential loss of a £10bn account by buying Murray Johnstone in a deal that makes it Scotland's biggest independent fund manager.

Aberdeen is paying £150m for the venerable Scottish firm, which was acquired by Old Mutual earlier this year under the UAM umbrella. Its £4bn of funds will raise Aberdeen's total under management by 17 per cent to £27.3bn.

Martin Gilbert, chief executive of Aberdeen, said yesterday: "This [acquisition] helps us in a number of areas that we want to get big in. It's a good fit, very strong." He said the firm's interests in England and North America, in particular, were complementary.

Shares in Aberdeen fell 32.5p on the news, to close at 532.5p.

Aberdeen is bracing itself to lose more than £10bn of funds after Abbey National, which is buying Scottish Provident from Aberdeen but has declined to take a stake in the latter, said it would appoint its own in-house managers to look after the investments. "We may lose these assets but they will only be about 5 per cent of our revenues in two years' time," said Mr Gilbert.

While Aberdeen will keep the brand name Murray Johnstone and build a "substantial business" around its core operation in Glasgow, some jobs are likely to go. One city analyst said: "There are significant cost savings to be achieved and it's a fair assumption that there will be overlap."

Aberdeen beat contenders including an Italian bank and a US financial institution to buy Murray Johnstone, and will finance the acquisition from its own cash resources and bank borrowings. Analysts expressed surprise at the lack of a rights issue and said Aberdeen had paid a "full" price for Murray Johnstone, which last year reported pre-tax profit of £5.3m.

Giles Weaver and David MacLellan, the chairman and managing director of Murray Johnstone, were both asked to join the Aberdeen board. Mr MacLellan said yesterday: "It's a relief to have got to this stage and I think Aberdeen is a very exciting company."

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