Aberdeen Jumps After Report Company Is Looking for a Buyerby
Aberdeen Asset Management Plc gained the most since April 2014 in London trading after a newspaper reported that the company has begun to sound out potential buyers.
The shares rose as much as 7.2 percent after the Financial Times reported that Martin Gilbert, the company’s founder and chief executive officer, had made informal approaches to a number of competitors in recent months, citing people familiar with the process. A spokesman for Aberdeen told Bloomberg that the CEO had never made a formal or informal approach to anyone to buy the business.
Aberdeen is grappling with an outflow of funds as investor sentiment toward emerging markets waned. Gilbert told Bloomberg last month that he had seen no let-up in client redemptions since the firm reported 9.9 billion pounds ($15 billion) of net outflows in the three months through June, on top of the 6.5 billion pounds for the previous quarter.
“Selling now would be an admission of failure,” Peter Lenardos, an analyst at RBC Europe Ltd. in London, wrote in a note to clients. “A potential buyer would clearly understand the challenges that Aberdeen is facing and reflect that in its determination of value for the company.” Lenardos, who has an underperform rating on the stock, said he doesn’t believe there’s a sales process under way.
The shares were up 4.5 percent to 367.4 pence at 10:25 a.m., giving Aberdeen a market value of about 4.8 billion pounds. That pared the decline for 2015 to about 15 percent.
The company, which invests about a quarter of its $438 billion of assets in emerging markets, will next update investors when it reports full-year results on Nov. 30.