Jarden shareholders will vote next week on a sale and merger proposal that is almost certainly a done deal.
Under the arrangement forged last month with the National Australia Bank (NAB) and Australian private equity firm, Pacific Equity Partners, Jarden will emerge with a 20 per cent stake in the new FirstCape entity and close to $100 million in cash.
Malcolm Jackson, Jarden wealth head and FirstCape chief-in-waiting, said in a release that the final price sits at the “upper end of the standalone valuation presented at Jarden’s July Shareholder update of between $136m and $255m”.
The top five Jarden shareholders own about 30 per cent of the company including the more than 10 per cent held by executive chair, Bill Trotter. Jarden’s board is “unanimously recommending” the proposal.
FirstCape will house the Jarden advisory network, the NAB NZ wealth subsidiaries (JBWere and BNZ Investments) and Harbour Asset Management. The group will also own a 25 per cent stake in direct-to-consumer investment platform, Hatch Invest – a joint venture with majority shareholder, FNZ.
If passed at the March 13 shareholder vote, Jackson said the deal should complete by the end of April, “subject to regulatory approvals”, creating an enterprise of 113 advisers, $29 billion of funds “under advice and administration” and $15 billion of funds under management (including over $9 billion of Harbour assets and about $6 billion of BNZ funds – $5 billion plus in its KiwiSaver scheme).
“For now, JBWere, Jarden and BNZ are continuing operating our respective businesses with no changes to the way they serve clients,” Jackson said.
But the structural pieces are already in place for the FirstCape conversion.
Jarden has established eight new entities – three recently renamed under various combinations of wealth and asset management with five remaining as numerical placeholders. NAB (via a NZ entity) owns 49 per cent of Jarden Four – one of the newly created FirstCape precursors.
The merger is also likely to see changes to some underlying fund managers in the BNZ KiwiSaver scheme, which was poised to leverage “Harbour’s asset management capability”, according to statement last December.
BNZ KiwiSaver and retail funds already uses Harbour for local fixed income (along with Nikko) but has a mix of three Australasian share managers – Mint, Castle Point and the First Sentier factor-based Real Index strategy. State Street manages global equities and fixed income for BNZ under a passive mandate while Columbia Threadneedle runs a more active international bond portfolio.
However, the BNZ Private Wealth Series also offers clients access to three other active global share managers – Antipodes, Intermede and the Copenhagen-based C Worldwide Asset Management (formerly known as Carnegie Asset Management).
The combined Jarden/JBWere wealth network of 113 advisers will be about half the size of the market leader, Forsyth Barr, which recently bought Hobson Wealth, while Craigs Investment Partners has just under 200.