Schroders (LON:SDR) has confirmed that it is in talks with Lloyds Banking Group (LON:LLOY) over working together in the wealth sector. The update came as Sky News reported yesterday that Lloyds was planning to inject its £13-billion wealth management arm into a new joint venture with Schroders.
Lloyds’ share price has fallen into the red in today’s session, having given up 0.79 percent to 58.47p as of 09:48 BST, and underperforming the benchmark FTSE 100 index which currently stands 0.36 percent lower at 7,292.11 points. Schroders’ share price meanwhile has jumped 0.80 percent to 3,024.00p.
Schroders confirms talks with Lloyds
Schroders said in a short statement to the London Stock Exchange this morning that it was “in discussions with Lloyds Banking Group plc with a view to working closely together in parts of the wealth sector”. The company, however, cautioned that the discussions were ongoing and that there was no certainty that they would result in a formal arrangement.
The news comes after it emerged last week that the asset manager was poised to beat BlackRock in a battle to win the auction for Lloyds’ £109-billion investment contract.
Companies reportedly planning JV
Sky News meanwhile reported yesterday that Lloyds was finalising the details of a partnership with Schroders. Sources told the newswire that the bailed-out lender will own 50.1 percent of the new JV, with Schroders holding the rest. The transaction will reportedly be part of a three-pronged tie-up between the companies, with Schroders taking on the £109-billion investment management contract from Lloyds.
The third leg of the Lloyds-Schroders tie-up is said to involve Cazenove Capital, with the bailed-out lender set to acquire a 19.9-percent stake in the division as part of the overall agreement, although Cazenove Capital would not be directly involved in the new wealth JV.