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£1.5bn proposal

Abrdn says talks ongoing with Interactive Investor

Abdrn has funds for a sizeable deal

Wealth manager Abrdn today said it noted media reports that it is in talks with JC Flowers & Co, owner of Interactive Investor, about a potential acquisition of the investment platform.

The companies confirmed at the weekend that discussions are taking place but did not disclose a price, though sources are indicating a deal in the region of £1.5 billion.

At lunchtime today, the shares were trading 8.60p (3.36%) higher at 264.3p.

In a statement to the stock market this morning, Edinburgh-based Abrdn said: “The company notes recent media speculation and confirms that it is currently in discussions with JC Flowers & Co regarding a potential acquisition of Interactive Investor. 

“There can be no certainty that these discussions will result in a transaction and a further announcement by the company will be made as and when appropriate.”

A deal would take Abrdn, formerly Standard Life Aberdeen, further step into the private investor market.

Our report on Saturday

It would give the FTSE-100 asset manager control of one of Britain’s three big DIY stock-picking platforms and would represent another bold move by CEO Stephen Bird since he took over in the summer of 2020 and began refocusing the company.

He wants to diversify its revenue base across three areas: investment, adviser and personal.

Last month, Abrdn swooped on Finimize, a subscription-based investment tips service.

Interactive Investor is majority owned by private equity firm JC Flowers and Co and has been emerging as a rival to Hargreaves Lansdown and AJ Bell. It was considering a flotation next year.

Stephen Bird

Stephen Bird: refocusing the group

It has more than 400,000 personal investing clients, positioning it behind only Hargreaves Lansdown by customer numbers in that segment of the investment market.

An Interactive Investor spokesperson said: “As the UK’s leading, subscription consumer investment platform…Interactive Investor has attracted interest from a number of parties.

“Discussions with Abrdn are ongoing, there can be no certainty that these discussions will result in a transaction. An IPO remains an attractive and possible outcome, and discussions around the process are also under way.”

It acquired the stock-dealing platform The Share Centre, and has about £57 billion in assets under administration.

Abrdn has been able to fund a large deal after selling part of its stake in India’s HDFC in late September.

It was for a time after the merger of Standard Life and Aberdeen Asset Management the UK’s largest standalone asset manager, before being overtaken by Schroders after losing about £200bn in assets.

Its share price has lagged those of its peers. Its stock has crashed by about 15% while its investment products have suffered outflows.

The company announced first half pretax profit of £163 million, a 77% jump from the same period last year.

The stock brokerage industry has been disrupted in recent times and is undergoing a period of consolidation. Morgan Stanley acquired E*Trade while Schwab has merged with TD Ameritrade. A few months ago, IG Group bought options trading firm TastyWorks.

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