Published: Thu, February 15, 2018
Business | By Tara Barton

Standard Life Aberdeen shares slump after £109bn Scottish Widows mandate is axed

Standard Life Aberdeen shares slump after £109bn Scottish Widows mandate is axed

At the time of the announcement of the 2017 merger of Standard Life plc ("Standard Life") and Aberdeen Asset Management PLC (the "Merger"), and as noted in Standard Life's shareholder prospectus dated 9 May 2017, Standard Life Aberdeen plc (LON:SLA), Lloyds Banking Group (LON:LLOY) and Scottish Widows committed to have discussions during the period of six months following the completion of the Merger on 14 August 2017.

They said last year's merger between Standard Life and Aberdeen Asset Management created competition issues.

Scottish Widows and Wealth entered into the partnership with Aberdeen following the sale of Scottish Widows Investment Partnership in 2014.

But Scottish Widows added that Aberdeen had "delivered good service and performance" and could take part in the review if it was "able to resolve the competition issue".

(LUV) has analyst mean rating score of 1.90
Bank of Hawaii raised its position in shares of Southwest Airlines by 0.3% in the 2nd quarter. (NYSE:LUV) now stands at 3.128598. Southwest Airlines has an average rating of "Buy" and a consensus price target of $67.93. (NYSE:LUV) for 90,138 shares.

Antonio Lorenzo, chief executive of Scottish Widows, said the company had begun an "in-depth assessment of the market" to identify replacement managers.

Laith Khalaf, senior analyst at Hargreaves Lansdown, said that LBG's decision to walk was hardly surprising given the rivalry between Standard Life and Scottish Widows, so "the prospect of one group managing the fund range of the other was never going to sit entirely comfortably in the corridors of power in Edinburgh". JPMorgan Chase & Co. restated an "overweight" rating on shares of Standard Life Aberdeen in a report on Thursday, November 16th. The average 12-month target price among brokerages that have updated their coverage on the stock in the past year is GBX 483.75 ($6.68).

In return, Lloyds had committed to keeping its assets invested with SLA for six months. "They will also find the field of suitors may be limited by the fact that some of the candidates come with the same baggage as Standard Life Aberdeen, namely a presence in the workplace pensions market".

However, this deal allowed Scottish Widows to exit the contract should Aberdeen Asset Management be subject to a change of control with a "material competitor".

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