NUCLEUS Financial has seen its shares surge around 40 per cent after the investment technology business revealed it has received multiple takeover approaches.
Edinburgh-based Nucleus said it is in talks regarding four potential bids for the firm. It has developed online platforms that can be used to help people and their advisers manage investment portfolios.
READ MORE: Edinburgh fintech increases staff numbers amid challenges posed by coronavirus crisis
The suitors include other platform providers and private equity firms.
Nucleus said there can be no certainty that any offer for the company will be made.
However the rise in the company’s share price yesterday indicated that City investors think there is a good chance a formal offer will be made for Nucleus.
The scale of interest reflects the impact that Nucleus has had on the fast-growing platform market.Nucleus has grown the value of funds that are administered on its platforms to around £16bn. It has more than 100,000 customers.
Demand for platforms has grown following changes in the pensions world which have required people to take more responsibility for saving for retirement.
A takeover would provide vindication for founder David Ferguson’s decision to launch Nucleus as a firm focused on investment technology. His stake in the firm is valued at around £3.4 million based on yesterday’s closing price of 185p per share.
However, a takeover of Nucleus could trigger concern about the resulting impact on Scotland.
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Nucleus employs around 250 people in Edinburgh. It is in the process of acquiring a Glasgow business it has been using to provide back office services, which employs 130 people. That transaction is expected to complete this year.
South African financial services group Sanlam could net around £70m if Nucleus accepted an offer at 185p per share. Sanlam provided early support for the development of Nucleus and has a 52% stake in the business. Nucleus said Sanlam is supportive of its board engaging in potential offer discussions. The company intends to work constructively with Sanlam to ensure that the interests of all shareholders are properly considered.
Nucleus said it has received separate proposals regarding possible cash offers from Integrafin, which provides platforms, and the London-based Epiris private equity firm, in conjunction with James Hay. This provides platform services.
Nucleus added that it is also in preliminary discussions regarding potential offers with US private equity firm Aquiline Capital Partners and Allfunds, which distributes investment products.
READ MORE: Scots financial technology firm's success shows investment in people pays
Mr Ferguson founded Nucleus in 2006 after working in product development and marketing for firms such as Ivory & Sime and Scottish Life.
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