Jardine Matheson Pays $262 Million to Bolster Stake in JLT
Jardine Matheson Holdings Ltd., a Hong Kong-based investment firm, agreed to raise its stake in Jardine Lloyd Thompson Group Plc (JLT) to 40 percent as it seeks to boost the insurance broker’s “competitive position.”
Jardine Matheson, which owns 30 percent of JLT, will pay 765 pence a share in cash, or 166.3 million pounds ($262 million), for a 10 percent stake, the companies said today in a joint statement. That’s 24 percent higher than the London-based stock’s closing price of 619 pence on Sept. 14.
“This is a good deal for shareholders,” Barrie Cornes, a London-based analyst at Panmure Gordon & Co. with a “hold” rating on the stock said today in a note to clients. “We view it as a vote of confidence in the business but it will remove any bid speculation in the share price.”
JLT, the U.K.’s biggest publicly traded insurance broker, has made at least 26 acquisitions in the last four years to expand in developing markets and into more specialist business lines. About 19 percent of the company’s profit is generated in Latin America and China, Chief Executive Officer Dominic Burke said in July.
JLT rose 7.1 percent to 663 pence in London trading today, the most since March 2009. That values the company at about 1.4 billion pounds.
“JLT is a core strategic investment of the Jardine Matheson Group and the partial offer reinforces our commitment to the stability, independence and long-term growth of JLT,” Anthony Nightingale, managing director of Jardine Matheson said in the statement.
JLT was created as a division of Jardine Matheson in 1972. Jardine Insurance Brokers, as it was known at the time, listed on the London Stock Exchange in 1991 and merged with Lloyd Thompson in 1997.
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