Requires registration
by Simon Keane
In raising her recommendation to a buy, eagle-eyed Katrina Preston, of independent broker Landsbanki, notes that Rensburg Sheppards’ largest investor Investec will be free to sell its 47% holding next month.
Investec’s shares were part payment for Carr Sheppards Crosthwaite which Rensburg bought off it in 2005. The deal was structured so that Investec couldn’t sell its shares for three years from completion which was 6 May 2005.
So what could happen when that agreement expires in a few weeks’ time? Preston believes Investec is unlikely to maintain the status quo but would not wish to take over Rensburg itself, opening the possibility of a third party bid.
The shares in Rensburg have almost halved in the past year, performing worse than other private client wealth management business, including Rathbone Brothers, Brewin Dolphin and Charles Stanley.
Rensburg’s unit trust business will have struggled more than most in the market downturn as its funds, while run by some of the City’s most highly rated managers, are skewed to small caps.
The company failed to give a update on funds under management at its 6 February interim management statement – do we take no news as good or bad? On a rating of 8.1 times her forecasts, Preston says Rensburg is the cheapest among its peers. Will a rival want to pick it up at bargain-basement prices? Expect corporate activity says Preston.