Sanlam makes £12.2m bid for Merchant Securities

Sanlam is to acquire wealth management firm Merchant Securities for £12.2 million as part of a strategy to break into the UK stockbroking market.

Merchant Securities, which provides investment management, corporate finance, institutional trading and private equity, will be taken over by Sanlam-owned company Bidco – with Sanlam UK owning 75% of the shares of Bidco and Merchant Securities management owning the remaining 25%.

In September Sanlam bought a 9.74% share in Merchant Securities ahead of the proposed bid. The offer represents 22p per Merchant Securities share.

Sanlam Private Investment chief executive and director of Bidco Daniel Kriel said: ‘This potential transaction would facilitate our entry into the UK stockbroking market and supports our strategy to expand our UK activities.

‘The successful completion of this transaction will expand our existing product and service offering to both our South African and UK high-net-work client base and would also enable us to provide clients with a global execution service from within our group. We searched for some time for the right UK business and identified Merchant Securities as a quality operation that will complement and add value to our team into the future.'

Sanlam already has a significant presence in the UK as the largest single shareholder in Nucleus and a majority stake in discretionary manager Principal Investment Management.  It also has a majority stake in advice firm Buckles, which was recently rebranded with the Sanlam livery, and has a stake in investment group Four Capital Partners.

The deal is subject to shareholder and regulatory approval.