27th Apr 2005 07:00
Premier Asset Management PLC27 April 2005 Premier Asset Management PLC Acquisition The Board of Premier Asset Management plc (the "Company") is pleased to announcethat it has entered into a conditional contract with Mr. John Eckersley, Mr.David Soutar and Mr. Jeremy Burden (as bare trustee for Burdens CharitableFoundation) (collectively the "Sellers" and principals behind CastlefieldInvestment Partners LLP, a UK limited liability partnership (the "LLP") whoseprincipal activity is discretionary fund management for charities and pensionfunds) to acquire a 30% stake in the LLP. No assets are being transferred intothe LLP by the Company pursuant to this transaction. For the year ended 31August 2004 the LLP made profits before tax of £255,822. A 30% interest in suchprofits before tax would have been worth approximately £76,764. Under the terms of the conditional partnership interest sale and purchaseagreement (the "Agreement") the Company shall acquire with effect from 1September 2005 a 30 per cent. interest in the LLP. In consideration for the acquisition referred to above, the Company has agreedto pay the Sellers in agreed amounts an aggregate consideration of £700,000which is to be satisfied by the issue to them or transfer from treasury ofordinary shares in the capital of the Company. The value attributable to theshares to satisfy the consideration will be based on a formula referable to themid-market price of the shares prior to the date of completion of the Agreement("Completion") or the date of issue of the shares (if higher). The consideration is payable in tranches and is subject to certain performanceconditions being met. The first tranche will be due on Completion (which shalltake place following the satisfaction of the conditions referred to below) whenthe Company shall issue or transfer shares having an aggregate value of £350,000to the sellers save that £87,500 will be paid in cash to the charitablefoundation. Two further tranches of £175,000 will become payable on certainmilestones being achieved, including the LLP obtaining discretionary funds undermanagement in excess of £80 million. These later tranches will also be satisfiedthrough the issue or transfer of shares. In addition the Company has agreed that if discretionary funds under managementof the LLP exceed £100 million then the Company shall issue and transfer suchadditional number of shares at the share values referred to above equivalent invalue to 0.699 per cent. of the excess but in any event capped at an aggregateamount of £350,000 in value. Notwithstanding the foregoing provisions, the Company may, at its option, whenthe number of shares to be issued or transferred would exceed 9.9 per cent. ofthe issued share capital of the Company, satisfy the consideration in cash. Completion is conditional upon the LLP obtaining FSA authorisation and Mr.Eckersley and Mr. Soutar being approved by the FSA and certain other terms. Upon Completion the terms of the LLP Agreement between the Company, the Sellersand Mr. Mark Elliott (the "LLP Agreement") shall come into force. The LLPAgreement governs the relationship between those parties in respect of theoperation of the LLP. The LLP Agreement provides in essence that the day to day operation of the LLPwill be run by Mr. Eckersley and Mr. Soutar but that the Company will havecertain rights of veto in respect of non-ordinary course of business matters.The LLP provides the Company with the rights to share in 30 per cent. of theLLP's profits subject to a prior profit share in favour of Mr. Eckersley and Mr.Soutar. Commenting on the transaction Mike O'Shea said "This association withCastlefield represents an exciting and profitable way for Premier to gain accessto the specialist charities and pensions management market. It also allowsCastlefield to leverage off our considerable operational and marketingresources, giving them access to our growing intermediary distribution. We verymuch look forward to working with the Castlefield team over the years ahead." Enquiries: Mike O'SheaPremier Asset Management PLC01483 306090 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PAM.L