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Deal approved

Nucleus shareholders back takeover by James Hay

David Ferguson

David Ferguson: founder (pic: Terry Murden)

A majority of Nucleus shareholders have accepted James Hay’s £145 million cash offer for the Edinburgh-based wrap platform.

The group announced that 91.73% of Nucleus’s shareholders voted for the offer at a price of £1.88 a share.

The offer represented a premium of 42% on Nucleus’s share price on 1 December, the last day prior to the offer period.

The deal will create an expanded company with combined assets of £45bn.

Richard Rowney, chief executive of Salisbury-based James Hay, said: “I’m very pleased that shareholders have overwhelmingly accepted our offer. 

“We are excited by the prospect of working with the Nucleus team as we seek to create a leading independent adviser platform with circa £45bn of assets under administration, and the scale to invest in the technology, products and service for the benefit of advisers and their clients.”

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The transaction is still subject to regulatory approval but is expected to complete in the second half of the year. There will be no immediate change for the advisers and their clients on either platform.

At the end of March James Hay switched its offer to a takeover offer which directly targeted shareholders. 

According to the James Hay, the tactic would offer “greater certainty of execution” as it would require a lower level of approval to push the deal through.”

The acquisition of Nucleus was triggered by South Africa-based financial services group Sanlam indicating a desire to sell its 52% holding.

Some Nucleus employees were unhappy about the proposed transfer of around 230 staff to FNZ which has offices in Edinburgh and is expected to provide platform technology for the enlarged group.

A spokesperson for James Hay said: “Following completion of the Nucleus acquisition, James Hay will perform a review of the combined group’s central and head headquarter functions.

“The review and integration process is expected to take up to 12 months and may identify opportunities to leverage skills and talents across the combined group, but may also lead to a moderate reduction in headcount where there is duplication or where operational efficiencies might be achieved.”

Nucleus Financial was set up in 2006 by chief executive David Ferguson whose stake in the business is valued at about £1.7m.

He previously worked at former Scottish fund manager Ivory & Sime and former life and investment firm Scottish Life International.

Nucleus floated on the Alternative Investment Market in 2018.

Earlier this month the company said it had grown assets under administration to £18bn as of 31 March 2021, up 28.4% year-on-year and 3.1% on the previous quarter.



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