Cortina Bidco, a newly incorporated US firm parented by Flexpoint Ford, has increased its offer for AFH Financial Group after a previous offer failed to gain the 75% shareholder backing.
The initial bid was at a price of £225m, which has now been increased to £231.6m, valuing each share at 480 pence.
AFH’s directors plan to unanimously recommend a favourable vote for the transaction to their shareholders for a second time. AFH, which has £6.2bn in funds under management, aims to counter what it sees as drawbacks in terms of growth from its 2014 initial public offering, relative to its privately-owned competitors “which have been able to scale their businesses, both organically and through M&A, at a faster pace”.
John Wheatley, chairman of AFH, said Flexpoint and Bidco would be “excellent partners” and the deal was “in the best interests of all stakeholders of the group”, speaking at the time of the initial offer.
If the acquisition gains shareholder approval, the current directors have agreed to retain their current positions.
Steven Begleiter, managing director of Flexpoint, commented back in January: “We believe that the UK wealth management market is currently undergoing an important transition, as regulatory and demographic trends are driving increasing demand for high quality financial advice that can be met by IFA firms with a long-term and client-centric view.
“In addition, the market is highly fragmented, which provides an opportunity to service customers better and create value through consolidation.”