Rensburg investor moves to take over control

The all-share offer values Rensburg at 412m and was recommended by the Leeds-based company.

Anglo-South African investment bank Investec will offer 1.63 new shares for every Rensburg share, giving a 48 per cent premium to Monday's closing price.

An outright takeover by Investec has been on the cards since Rensburg merged with its wealth management firm Carr Sheppards Crosthwaite in 2005, a deal which gave the FTSE 100 company 47.7 per cent of the enlarged wealth manager.

Rensburg chairman Christopher Clarke said the offer was "an attractive outcome for our shareholders, clients and employees", offering a significant premium and more liquid Investec shares.

Shares in Rensburg leapt 40 per cent to close up 247.5p at 867.5p.

Investec said its takeover had the backing of two of Rensburg's biggest shareholders, Schroders and BlackRock, who hold another 10.6 per cent of the company.

Rensburg chief executive Steve Elliott said: "This transaction provides clarity over our ownership and is enhanced by a strong strategic fit and common vision.

"With very limited overlap between Rensburg Sheppards' and Investec's existing operations, continuity will be ensured for clients and employees.

"Being part of Investec will reinforce the strong momentum in our business and we will be well placed to grow organically and through participation in industry consolidation."

Rensburg, which traces its roots back to the early 19th Century, had itself been plotting a growth spurt. Last year it poached eight investment managers from Bank of Scotland to bolster its Edinburgh office.

After seeing funds under management eroded by the recession, it was gaining momentum as confidence and equity markets improved. By the end of December funds under management had risen 1.5 per cent on three months earlier, to 12.31bn.

Investment management fees rose 21.4 per cent and commissions improved by 27.1 per cent in the three months to the end of December.

The group has 11 offices throughout the UK, and more than 600 employees. A spokesman said Investec intended to keep the company as it is, and had no plans for job losses. It will use Rensburg as a channel for growth.

Investec will need the support of at least 75 per cent of Rensburg shareholders to seal the takeover.

Investec chief executive Stephen Koseff said the offer was "the natural next step for both businesses", as it grows its wealth and asset management business.

"We believe that Rensburg Sheppards will thrive as part of the Investec group," he said. "We look forward to supporting Rensburg Sheppards and enhancing our strategic position by building an even stronger business in this core area of the market."

The two companies have worked closely together since the merger with Carr Sheppards Crosthwaite in 2005.

Catherine Heath, analyst at Altium Securities, said: "We also see a positive read across to Brewin Dolphin and Rathbones.

"On the basis that execution risk looks limited, the level of support for the offer and the improbability of a competing offer, we are moving our price target for Rensburg up to 916 pence."

Growth began in 19th Century

Rensburg Sheppards has its roots in the 19th Century's financial expansion.

It can trace its history back to 1837, when stockbrokers Stanley Battye & Co was founded in Huddersfield.

Yorkshire stockbrokers William Wimpenny and Abraham Dawson opened firms in later years and Henry Rensburg started his stockbroking firm in Liverpool in 1873.

Battye, Wimpenny and Dawson merged to create BWD Securities in the 1970s. In 1988 the holding company floated on the London Stock Exchange; soon after, BWD and Rensburg joined forces.

In 2004 the company changed its name from BWD Securities to Rensburg and in 2005 it merged with Carr Sheppards Crosthwaite, to create Rensburg Sheppards.