Paper shortage delays Abrdn shareholders’ vote on £ 1.5bn deal

Asset manager Abrdn has been forced to postpone a £ 1.5bn shareholder vote on a deal due to a paper shortage caused by problems with the international supply chain.

The FTSE 100 group will contact shareholders on Wednesday, announcing the delay in voting on its proposed acquisition of the Interactive Investor retail platform.

Abrdn originally intended to complete the vote before announcing the annual results on March 1, the first set of numbers for the year since CEO Stephen Byrd took office in September 2020. The takeover vote will now be postponed until mid-March.

The delay was first reported by Sky News.

“There was a shortage and other companies are also expected to be affected,” Abdn said. “We have such a large group of retail shareholders and this is not a small distribution document.”

The UK Acquisition Rules, established in 1968, require companies to send paper versions of documents to all shareholders. Information about the deal with Abrdn covers 120 pages, and the group has about 1.1 million shareholders. The company said the document would be released this week.

Demand for paper rose during the pandemic, with the e-commerce boom and the need for cardboard exacerbated by shortages of containers and other transportation problems. Shortages and delays have affected many groups, including booksellers and publishers.

Dan Kemp, Morningstar’s chief investment officer, warned that other groups that need to communicate with shareholders may experience similar difficulties.

“We are entering the voting season later in the quarter, so we can see more [of this] it happens then, “he said. “This speaks to the inflationary pressures that everyone is focusing on at the moment, although it is difficult to say how much of the increased demand and how much of the supply chain problems,” he said.

The deal to buy Interactive Investor is Bird’s biggest bet for the transformation of the UK-based asset manager, which has £ 532 billion in assets under management but suffers from outflows and reduced share prices five years after its creation by Standard Life and Aberdeen.

Interactive Investor is the second largest supermarket for funds in the United Kingdom, with £ 55 billion in assets under management.

Abrdn believes the purchase will be crucial to transforming the asset manager in an age where fees are shrinking and people need to take more responsibility for funding their retirement.

However, investors and analysts have conflicting views on the prospects of the deal. HSBC analysts describe it as “game-changing”, but some leading Abrdn shareholders have expressed reservations about the price and how it will be integrated.

Interactive Investor was expected to trade for between £ 1.5 billion and £ 2 billion before Abrdn stepped in to buy it in December.

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