Aberdeen needs to raise cash to buy Pioneer

Aberdeen Asset Management, one of the reported bidders for Unicredit’s asset manager Pioneer Investments, would need to raise material new capital for the takeover, something that is not expected in the short-term.

The asset manager’s main hurdle to buy Pioneer for a rumoured €3bn valuation is that Unicredit needs cash and Aberdeen does not have it – according to a Numis note to investors, the asset manager would need to raise a significant amount of new cash and it takes time, which puts the asset manager in disadvantage to some other bidders in the process.

“We suspect this is why Amundi […] has been cited in the press as being a front runner in the process, ahead of Aberdeen,” Numis analyst David McCann states on the note.

However, Aberdeen is a “serial deal-making” company, so nothing can be ruled out, McCann said.

“Aberdeen has a good track record of synergy delivery and this deal would also increase group diversification,” he added.

According to media reports, other companies vying for Unicredit’s asset management unit are an Italian consortium led by Poste Italiane, Australia’s Macquarie and European asset manager Amundi.

A well-place source told InvestmentEurope the Italian consortium has submitted a non-binding bid for the Pioneer’s auction.

Macquarie declined to comment on the reportedly takeover bid, Amundi also declined to comment but did not deny the news and Aberdeen did not reply the request for comment.

According to Reuters, the decision on the final buyer is not likely to be made before the Italian referendum on 4 December.

The Numis note to investors highlights there is currently an appeal for M&A given a current industry backdrop of low organic growth, fee margin pressure and rising regulatory costs.

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