LONDON, May 14 (Reuters) - Alliance Trust, the investment company recently tackled by shareholders over issues of governance, strategy and performance, has struck a deal to buy a stockbroking business from Brewin Dolphin for 14 million pounds.
The proposed acquisition of Stocktrade by Alliance Trust Savings accelerates its parent company’s movement into the provision of personal finance and sharedealing products.
The deal has the potential to add more than 48,000 new customers and 4.6 billion pounds ($7.24 billion) of new assets, Alliance Trust said in a statement on Thursday.
The company also said it expected the acquisition to transform ATS’ current break-even profitability into “meaningful profit in 2016” prior to integration costs.
Some of Alliance’s shareholders have signalled disapproval of this strategy and demanded that the trust sell the subsidiary to focus on its core investment business.
“As set out in our vision 2020, our objective is to become the UK’s most trusted investment and savings business,” Chief Executive Katherine Garrett-Cox said.
“Over the last couple of months we have received a lot of valuable feedback from our shareholders. We are currently analysing that feedback and we will update shareholders further at our interim results in July.”
ATS currently administers more than 7.2 billion pounds in assets for around 57,000 customers. Completion of the transaction is expected to take place towards the end of the third quarter of 2015.
$1 = 0.6351 pounds Reporting By Sinead Cruise, editing by Simon Jessop