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Merchant Securities

  • BY: Andrew Hore |
  • POSTED: 31/08/2011 |

Aim adviser Merchant Securities has received a bid approach from Sanlam.

Sanlam (www.sanlam.co.za) is a South African financial services business. The Cape Town-based business is more than 90 years old and it was demutualised in 1998. Sanlam is listed on the Johannesburg and Namibian Stock Exchanges. Core earnings were R4.15bn in 2010.

Sanlam has bought 5m shares at 14p each, which is equivalent of 9.74% of Merchant Securities.

There are preconditions to the bid approach. They include the unanimous recommendation of the Merchant Securities board and the completion of due diligence.

The bid approach is through Sanlam UK, which provides life, pension and investment management services in the UK. It appears that Merchant Securitiesí wealth management activities could be the main attraction for Sanlam. Acquisitions helped the private client wealth management division of Merchant Securities to more than double funds under management from £205m to £487m in the year to March 2011.

At 15p a share, up 3.5p on the news, Merchant Securities is valued at £7.7m. This is still well below the 2011 high of 24p a share, which was reached around six months ago.

Download the August 2011 edition of AIM Journal at http://www.hubinvest.com/AIMPDFAugust2011_23.pdf

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