Schroders Shareholders Warned Over Undvaluation from £9.9 Billion US Bid

A Schroders shareholder has expressed concerns regarding the perceived undervaluation of the company following a £9.9 billion bid from US asset manager Nuveen. The investment firm JO Hambro highlighted that the proposed deal, set at a cash offer of 612 pence per share, reflects a discounted price that underscores the low valuation of firms on the London Stock Exchange.

The Schroder family, which holds a 42 per cent stake in the FTSE 100 group, has supported the acquisition, indicating their endorsement of the transaction. Analysts and fund managers at JO Hambro noted that while they appreciate the opportunity to realise value from Schroders’ shares, the agreed price appears to be 10 per cent to 15 per cent lower than what they consider equitable.

Nuveen’s offer involves a payment of 590 pence per share in cash, complemented by a dividend of 22 pence, marking a 29 per cent premium over the company’s undisturbed share price before the bid was announced. The merger aims to retain the Schroders brand while maintaining London as the non-US headquarters for the combined group.

Dame Elizabeth Corley, chair of Schroders, reassured stakeholders that the London office will continue to be central to the operations of the new entity following the merger. The agreement is seen as part of a broader trend where American firms and private equity investors are increasingly targeting undervalued companies within the UK market.

As the industry witnesses this shift, shareholders are left contemplating the implications for future valuations and the strategic direction of Schroders itself. The outcome of this acquisition will undoubtedly influence the competitive landscape of asset management in the UK.