EMPLOYEES of Nucleus Financial have said they are opposed to the proposed £145 million takeover of the Edinburgh-based financial technology firm amid “significant anxiety” about the impact on jobs.

Nucleus directors last month recommended shareholders accept a 188p per share cash offer for the investment platform specialist from a rival business, James Hay Holdings.

READ MORE: Leading Scottish financial technology firm set to succumb to £145m takeover

However, the document detailing the terms of the proposed takeover shows employees at Nucleus have big misgivings about what it will mean for staff.

The document notes that a People Representative Group convened by Nucleus in accordance with regulations had initially been supportive of the idea of combining the two businesses.

However, the employee group came out against the deal after considering changes planned by James Hay, which has offices in Salisbury. James Hay is backed by the London-based Epiris private equity business.

The move by the PRG reflects concern that James Hay has said an unspecified number of jobs may be cut in central functions in the enlarged business following the takeover.

The PRG is also unhappy about the proposal to require around 230 of the 400 staff at Nucleus to transfer to another fintech, FNZ, which has offices in Edinburgh. It is expected that FNZ will provide platform technology for the enlarged group.

READ MORE: Does sale of Standard Life brand bode ill for Scotland's once mighty pensions industry?

The document states PRG members are opposed to the acquisition “on the basis of its concerns regarding the impact the proposed strategy of moving the underlying technology and operations of Nucleus”. It says members are also concerned that James Hay has said the deal may be followed by “a moderate reduction in headcount where there is duplication or where operational efficiencies might be achieved”.

Feedback obtained by the PRG suggests “ there is significant anxiety within the staff body regarding both the move to FNZ and the review of the central and HQ functions”.

The document highlights “the extremely positive and constructive “relationship that exists between employees and the management of Nucleus. Chief executive David Ferguson started the business in 2006.

The comments may stoke concern in Scotland about the takeover of stock-market listed Nucleus, which is a star of the emerging fintech sector.

The document notes the process behind the acquisition was initiated by South African financial services group Sanlam, which has a controlling 52% shareholding in Nucleus. Sanlam has given a binding irrevocable undertaking to vote in favour of the deal. Nucleus directors with shares in the firm, including Mr Ferguson, have also undertaken to back it.

READ MORE: Wealth manager eyes acquisitions in Scotland

The document says Nucleus directors believe the firm would thrive as an independent but the acquisition represents an attractive opportunity for shareholders to sell their shares at a significant premium to the price before James Hay made a bid approach in December.

The document notes the importance James Hay places on the skills and experience of Nucleus employees and that the review of staff requirements that could result in redundancies will encompass all employees of the combined group.

It also notes that James Hay has said it will work with Nucleus’ management team to evaluate the existing platform arrangements and “intends no change to existing locations or place of work for employees”.

Nucleus recently moved into Glasgow after acquiring a business run from the city.

READ MORE: Edinburgh fintech acquires Glasgow business

The takeover must be approved by shareholders who represent 75% of votes cast at meetings that will be held on March 30.

In an appendix on the opinion of Nucleus' employee representatives, the takeover document notes the PRG gathered staff opinions through a survey that had 128 responses and workshops that were attended by 220 employees.

It states: "The PRG note feedback from the staff working groups and the survey suggests there is significant anxiety within the staff body regarding both the move to FNZ and the review of the central and HQ functions and that full and early engagement with the PRG and employees will be important in relation to staff retention."