SHAREHOLDERS will have their say on Standard Life’s proposed merger with Aberdeen Asset Management on Monday, amid governance concerns over the £11 billion tie-up.
The deal requires the backing of at least 75 per cent of Aberdeen shareholders and 50 per cent of Standard Life investors. Experts believe it will be given the all-clear despite unease over the joint chief executive structure and a bumper 16-member board.
The combined entity, to be called Standard Life Aberdeen, will be headed up by Keith Skeoch, CEO of Edinburgh-headquartered Standard Life, and Aberdeen boss Martin Gilbert. Skeoch said last month that it was “abundantly clear” both men would be required at the helm in order to “get things done”.
David McCann, analyst at Numis Securities, believes the deal will be voted through by shareholders.
He said: “Future success in the active asset management industry will be determined by being big or small/boutique: you do not want to be stuck in the middle. We think the deal reflects Aberdeen and Standard Life choosing to be big.”
The merger will make the combined group a top-20 player worldwide by assets under management, he added.
Eyebrows have also been raised over the proposed bonus structure that will see chief investment officer Rod Paris eligible to earn 865 per cent of his £450,000 base salary. But prospects for investor approval have been boosted after two influential shareholder advisory groups, Institutional Shareholder Services and Glass Lewis, threw their weight behind the tie-up.
As well as institutional shareholders, Standard Life will also have to convince a sizeable number of retail investors, which make up half of its share register.
The deal also faces regulatory scrutiny, with the Competition and Markets Authority launching an investigation last month.
The merger would create Europe’s second-biggest fund manager with £670 billion under management. It is targeting cost savings of £200m a year, with around 800 jobs expected to be lost over three years from a global workforce of 9000.
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