Liverpool wealth manager Rathbones confirms £2bn merger talks sending shares upwards

300-year-old business which was famous for its opposition to the slave trade is in talks with rival Smith & Williamson about creating combined business managing £56bn of funds. Tony McDonough reports

The Port of Liverpool Building, home to Rathbone Brothers. Picture by Tony McDonough

 

Shares in Liverpool wealth management firm Rathbone Brothers rose on Monday as the company confirmed it was in merger talks with rival Smith & Williamson (S&W).

On Sunday national media outlets said discussions had begun between the two firms about a tie-up that would create a business with a combined value around around £2bn and funds under management of £56bn.

Rathbones is based at the Port of Liverpool building on Liverpool’s waterfront and also has a major base in London. It is listed on the FTSE-250 Index.

Discussions under way

In a statement to the Stock Exchange on Monday, it said: “Whilst these discussions have been under way for some time and the boards of both Rathbones and S&W are confident that the combination would bring meaningful benefits for the stakeholders of both businesses, discussions are ongoing and there can be no certainty any transaction will be agreed.

“However, if agreed, any such transaction will be subject to the approval of shareholders.”

The combined business would have a headcount of more than 3,000 people.

Wealth manager

Rathbones started out in the 1720s as a family timber merchant but eventually became a private wealth management business which today manages funds and assets worth £36bn for wealthy individuals and charities.

The smaller S&W, which manages around £19bn of funds, is mostly owned by its employees and is valued at between £500m and £600m.

Shares in the stock market-listed Rathbones have risen by 40% this year and Monday’s early rise sent its stock up nearly 2% to give the firm a market cap of £1.45bn.

Ethical stance

Rathbones made a name for itself in Liverpool in the 18th century for its opposition to the slave trade. This was a remarkable stance given the astonishing amount of money being made by slave traders in the city at the time.

At the height of the slave trade and up to its abolition in 1807, up to 130 ships a year left Liverpool for Africa.

More than 3m people were transported across the Atlantic from Africa until the slave trade was abolished in 1807

 

Around half of the 3m slaves transported across the Atlantic from Africa travelled on Liverpool vessels. Slavery itself was made illegal by Britain in 1834.

The Rathbones were a Quaker family and, despite the culture of the age, viewed the trade in human beings as morally abhorrent.

Founder member

William Rathbone IV, born in 1757, was the most prominent member of the family to publicly denounce the slave trade and was a founder member of the Liverpool Committee for the Abolition of the Slave Trade.

To this day Rathbones continues to speak out against modern slavery and human trafficking and in 2014 lobbied the Government calling for greater transparency in global supply chains.

The company also has a long history of philanthropy, both in Liverpool and across the UK, supporting sporting, health and education programmes for young people.

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