Jupiter looking at sale of wealth management business, reports say

13th Jan 2014 16:28

Fund manager Jupiter is looking at a possible sale of its wealth management business, estimated to be worth around 50m pounds, according to weekend press reports.The Sunday Times suggested that Jupiter, which has been run by Chief Executive Officer (CEO) Edward Bonham Carter for 14 years, has received an unsolicited takeover offer for the division from a number of investment names, including Rathbones, Towry and Quilter.The division was last reported to have a funds under management of £2.2bn.Analysts at Numis Securities said that as part of Jupiter the unit is worth around £27-34m, so a £50m offer "would appear to make financial sense" for the company to sell. "Moreover, we believe that this price could still allow modest value accretion for a trade buyer, since they would likely be able to extract modest back office cost synergies and perhaps more importantly would have the proper resource to allow this business to grow more quickly, given a core rather than non-core focus," the broker said.Numis also suggested that a potential disposal could lead to a cash return to shareholders via a special dividend, given Jupiter's "historical conservatism with regards to acquisitions and [...] a healthy balance sheet".The speculation comes just a month after Bonham Carter announced his intention to step down as CEO and take on a new executive role as Vice Chairman. He will be replaced by Maarten Slenderbroek, currently Distribution and Strategy Director and a former director at asset management giant BlackRock.Jupiter is set to update the market with a trading statement for the fourth quarter of 2013 on Thursday January 16th.The stock was 0.57% higher at 387.2p by the close on Monday.BC