Man is heading the FTSE 100 risers as bid hopes return after its recent poor performance.
The hedge fund group has been under pressure on worries about slowing growth and weak results from its key AHL fund. But its shares have jumped 4.65p to 97.2p, a 5% increase, after UBS analysts said it could be a prime target for a north American asset manager. Analyst Arnaud Giblat said:
We estimate that Man is currently trading 5% below the combined value of AHL being run off (38p a share), GLG (33p a share), the institutional business (9p a share) and its net cash position (20p a share). With Man shares having traded below150p for a six-month period, we believe that a 50% plus premium bid offer to the current share price would be sufficient to obtain shareholder approval.
The acquirer would be paying ....for high-quality global distribution in onshore retail products, with a focus on the $1trn Asia-Pacific and Japanese markets. Growing such exposure organically has proven extremely difficult and costly for many asset managers.
We would not be surprised to see a bid from a north American asset manager that is trading on high earnings multiples, has surplus capital and has stated its intent to diversify geographies and product exposures.
Meanwhile Singer Capital Markets also repeated its buy rating, albeit cutting its price target from 190p to 170p.
