Merrill Lynch & Co. today offered to buy Mercury Asset Management, the U.K.'s largest pension fund manager, for £3.1 billion ($5.25 billion) in cash. Boards of both firms have blessed the acquisition.
The deal would make the combined entity, Merrill Lynch Mercury Asset Management, one of the world's largest money managers, with $450 billion under management.
Merrill is offering £17 per share, a 31.7% premium over Mercury's £12.91 closing price yesterday. With £104.4 billion in assets under management as of Sept. 30, the deal values Mercury's issued shares around 3% of assets under management.
Investment Counseling advised Mercury in the transaction.
Merrill Lynch Mercury will be based in London. Mercury Chairman Hugh Stevenson will serve as non-executive chairman for a year. Stephen Zimmerman, MAM's deputy chairman, and Carole Galley, vice chairman, will serve as co-heads of the combined unit and will join parent Merrill Lynch's executive management committee.
The investment approaches of Merrill Lynch Capital, a unit of Merrill Lynch Asset Management that also includes Hotchkis and Wiley, will not be affected, a spokesman said.
Deutsche Shell AG is creating a 2 billion deutsche mark ($1.16 billion) pension fund in a move to generate higher returns from its assets, said Jens-Peter Stoehr, treasurer. Four managers will be hired as will a global custodian.
The Hamburg-based fund will be split into two major components: 60% in European assets and 40% in non-European assets; two managers will be selected for each. Each of the four portfolios will be divided 50-50 between stocks and bonds. One of the portfolios is expected to be passively managed, but which one has not yet been decided.
Tentative selections of money managers and a global custodian will be made Friday, and will be submitted to Deutsche Shell's board next week. The Netherlands' Shell Pensioenfonds Beheer is bidding for one of the European portfolios, in its first effort to manage assets for a sister company pension fund. Other contenders include Deutsche Bank and State Street Global.
The assets now are invested in cash that backs a book-reserve pension fund.
Alaska Permanent Fund staff will recommend the $19 billion Juneau-based fund hire AEW Capital Management, according to a report to the trustees.
AEW could be assigned $300 million to manage in a REIT. The fund will use the Morgan Stanley REIT index as a benchmark. The trustees could vote on the recommendation this week.
Kayla Gillan, general counsel for the $127 billion California Public Employees' Retirement System, Sacramento, sent a letter to the SEC on behalf of the fund's board protesting some of the agency's proposed changes to shareholder resolution rules.
The letter said the proposed resubmission thresholds are too high. It also said the proposed personal grievance rule should be amended to allow exclusion only of proposals which, on their face, relate to a personal grievance and that the relevance threshold exclusion be clarified.
Ms. Gillan also wrote that CalPERS supports the SEC's plan to reverse the Cracker Barrel decision, which has excluded from proxy statements all employment-related proposals related to significant social policy issues.