RECOMMENDED ACQUISITION
of
CHARLES STANLEY GROUP PLC
by
RAYMOND JAMES UK WEALTH MANAGEMENT HOLDINGS LIMITED
a wholly-owned subsidiary of
RAYMOND JAMES FINANCIAL, INC.
(to be implemented by way of a scheme of arrangement under Part 26 of the Companies Act 2006)
Summary
· The boards of Raymond James Financial, Inc. (“Raymond James”) and Charles Stanley Group PLC (“Charles Stanley”) are pleased to announce that they have reached agreement on the terms of a recommended acquisition by Raymond James UK Wealth Management Holdings Limited (“Bidco”) of the entire issued and to be issued share capital of Charles Stanley (the “Acquisition”). It is intended that the Acquisition be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act.
· Under the terms of the Acquisition, Charles Stanley Shareholders will be entitled to receive:
for each Charles Stanley Share 515 pence in cash
· The terms of the Acquisition value each Charles Stanley Share at 515 pence and Charles Stanley's entire issued and to be issued share capital at approximately £278.9 million.
· The terms of the Acquisition represent a premium of approximately:
· 43.5 per cent. to the Closing Price per Charles Stanley Share of 359 pence on 28 July 2021 (being the last practicable date prior to the date of this Announcement);
· 47.6 per cent. to the volume weighted average Closing Price per Charles Stanley Share of 349 pence for the three months ended on 28 July 2021 (being the last practicable date prior to the date of this Announcement); and
· 53.8 per cent. to the volume weighted average Closing Price per Charles Stanley Share of 334.8 pence for the six months ended on 28 July 2021 (being the last practicable date prior to the date of this Announcement).
· Under the terms of the Acquisition, a Loan Note Alternative will be available to Charles Stanley Shareholders (other than Charles Stanley Shareholders resident or located in a Restricted Jurisdiction, including the United States) which will enable eligible Charles Stanley Shareholders to elect to receive Loan Notes in lieu of part or all of the cash consideration to which they would otherwise be entitled under the terms of the Acquisition.
· Raymond James has long admired Charles Stanley's reputation, heritage and its talented pool of investment managers, financial planners (collectively referred to as wealth managers) and professionals. The two firms share a common client-centric approach and both offer employed and self-employed affiliation models, while Raymond James also provides platform services, enabling the flexibility that wealth managers value. Charles Stanley meets Raymond James' historical acquisition criteria, in particular as an excellent strategic fit with a complementary culture.
· The Acquisition would provide both Raymond James and Charles Stanley with the opportunity to accelerate the growth of their respective current UK wealth management businesses, creating operations with the scale to support expansion and flourish in a highly competitive and consolidating UK marketplace. Charles Stanley would allow Raymond James to benefit from the contributions of approximately 200 additional wealth managers, many of whom are located in key geographic areas across the United Kingdom that Raymond James has targeted for expansion. Charles Stanley would add approximately £27.1 billion in client assets, bringing Raymond James' total client assets in the UK to over £40 billion. Raymond James shares Charles Stanley's vision of a broad holistic wealth proposition offering discretionary, advisory and execution services delivered from bespoke through to digitally-supported formats.
· Raymond James is confident that the Acquisition would provide major benefits to all stakeholders, and that, with further investment, it would strengthen and enhance the range of services available to clients of both Raymond James Investment Services (“RJIS”), Raymond James' UK wealth management business, and Charles Stanley and their respective wealth managers.
· The Charles Stanley Directors, who have been so advised by Rothschild & Co as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the Charles Stanley Directors, Rothschild & Co has taken into account the commercial assessments of the Charles Stanley Directors.
· Accordingly, the Charles Stanley Directors intend to recommend unanimously that Charles Stanley Shareholders vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the General Meeting, as the Charles Stanley Directors have irrevocably undertaken to do in respect of their entire beneficial holdings of 7,648,192 Charles Stanley Shares, in aggregate, representing approximately 14.7 per cent. of the issued share capital of Charles Stanley as at 28 July 2021 (being the last practicable date prior to this Announcement).
· Raymond James has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the General Meeting from members of the Howard Family in respect of 10,330,864 Charles Stanley Shares, representing approximately 19.8 per cent. of Charles Stanley's issued share capital as at 28 July 2021 (being the last practicable date prior to this Announcement). Sir David Howard has also undertaken to use reasonable endeavours to procure that Queen Street Securities Limited, a company incorporated in Jersey through which Sir David Howard and his wife hold interests in certain Charles Stanley Shares, will, as soon as practicable following this Announcement, enter into an irrevocable undertaking to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the General Meeting in respect of 2,102,500 Charles Stanley Shares, representing approximately 4.0 per cent. of Charles Stanley's issued share capital as at 28 July 2021 (being the last practicable date prior to this Announcement).
· In aggregate, therefore, Raymond James has received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the General Meeting from the holders of 17,979,056 Charles Stanley Shares in total representing approximately 34.5 per cent. of Charles Stanley's issued share capital as at 28 July 2021 (being the last practicable date prior to this Announcement). Further, if Sir David Howard succeeds in procuring Queen Street Securities Limited to enter into an irrevocable undertaking in respect of its entire holding of Charles Stanley Shares, Raymond James will, in aggregate, have received irrevocable undertakings to vote in favour of the Scheme at the Court Meeting and the resolutions relating to the Acquisition at the General Meeting from the holders of 20,081,556 Charles Stanley Shares in total representing approximately 38.5 per cent. of Charles Stanley's issued share capital as at 28 July 2021 (being the last practicable date prior to this Announcement).
· Raymond James is a US company with its headquarters located in St. Petersburg, Florida. Public since 1983, the firm has been listed on the New York Stock Exchange since 1986 under the symbol RJF. Raymond James is a multinational independent investment bank and financial services company providing financial services to individuals, corporations, and municipalities through its subsidiary companies that engage primarily in investment and financial planning, in addition to capital markets, banking and asset management services.
· Bidco is a newly incorporated Jersey private limited company and a direct subsidiary of Raymond James. Bidco has been formed at the direction of Raymond James for the purposes of implementing the Acquisition. Bidco has not traded since its date of incorporation, nor has it entered into any obligations other than in connection with the Acquisition.
· Having been founded over 200 years ago, Charles Stanley is one of the UK's leading wealth management firms, providing a range of financial planning and investment management services principally to private clients but also serving national charities, trusts, financial advisers and professional institutions.
· Commenting on the Acquisition, Paul Reilly, CEO of Raymond James, said:
“We have long respected and admired Charles Stanley and believe our proposal presents an extremely attractive opportunity to combine our respective UK wealth management operations. Raymond James will seek to leverage the respective strengths of Charles Stanley and Raymond James through further investment in technology, infrastructure and back office partnerships to enhance the firms' already strong offering in wealth management.”
· Commenting on the Acquisition, Paul Abberley, CEO of Charles Stanley, said:
“The Board believes that the terms of the Acquisition represent fair value and an attractive premium for Charles Stanley shareholders and therefore intends to recommend unanimously that Shareholders vote in favour of the Acquisition. Raymond James recognises Charles Stanley' reputation, heritage and talented staff, as well as our shared client-centric approach and compatible structures and cultures. Supported by the clear strategic rationale and intentions Raymond James has described today, I believe all stakeholders will benefit from the opportunities for growth arising from Charles Stanley becoming embedded within the Raymond James group.”
· Save for the Permitted Dividend, if any dividend or other distribution is authorised, declared, made or paid in respect of Charles Stanley Shares on or after the date of this Announcement, Raymond James reserves the right to reduce the consideration payable for each Charles Stanley Share by the amount of such dividend or other distribution.
· It is intended that the Acquisition will be implemented by way of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act (or, if Raymond James so elects, subject to the approval of the Panel and with the consent of Charles Stanley under the terms of the Co-operation Agreement, an Offer)
· The Acquisition is conditional on, among other things: (i) the approval of Charles Stanley Shareholders at the Court Meeting and the passing of the resolutions by Charles Stanley Shareholders at the General Meeting; (ii) the sanction of the Scheme by the Court; and (iii) the FCA having notified Raymond James and/or Charles Stanley of its approval of the change of control of any UK authorised persons within the Charles Stanley Group as a result of the Acquisition (or the requisite assessment period for such approval to be provided having elapsed without the FCA having objected to the Acquisition).
· The Acquisition is expected to become Effective in the fourth quarter of 2021, subject to the satisfaction (or, where applicable, waiver) of the Conditions set out in Appendix I to this Announcement.
Further details of the Acquisition will be contained in the Scheme Document which is intended to be published along with notices of the Court Meeting and General Meeting and the Forms of Proxy within 28 days of the date of this Announcement, unless Charles Stanley and Raymond James otherwise agree, and the Panel consents, to a later date. Subject to certain restrictions relating to persons resident in Restricted Jurisdictions, the Scheme Document will also be made available on Raymond James' website at raymondjames.com/offer-for-charles-stanley and Charles Stanley's website at charles-stanley.co.uk/investor-relations.
This summary should be read in conjunction with, and is subject to, the full text of this Announcement (including its Appendices).
The Acquisition is subject to the Conditions and further terms that are set out in Appendix I, and to the full terms and conditions which will be set out in the Scheme Document. Appendix II contains the bases and sources of certain information used in this Announcement. Appendix III contains details of the irrevocable undertakings received in relation to the Acquisition that are referred to in this Announcement. Appendix IV contains definitions of terms used in this Announcement.