Standard Life Aberdeen share price up amid Lloyds settlement

Standard Life Aberdeen’s (LON:SLA) share price has extended the previous session gains in early trade this morning as the company reached a settlement with Lloyds Banking Group (LON:LLOY) over the latter’s move to terminate a £100-billion asset management contract early. The news comes after reports of the upcoming settlement emerged earlier this week.

Standard Life Aberdeen’s share price rose in the previous session, gaining 1.89 percent to end trading at 307.20p, outperforming the broader UK market, with the benchmark FTSE 100 index ending trading 0.56 percent higher at 7,556.86. This morning, the shares have gained 0.81 percent to 309.70p as of 08:04 BST, as compared with about a 0.2-percent dip in the Footsie.

Settlement of arbitration

Standard Life Aberdeen announced in a statement this morning that it had agreed a final settlement with Lloyds which will see it  continue to manage approximately one third of the total assets under management, or about £35 billion as at June 30 on behalf of the bailed-out lender until at least April 22. In addition, the FTSE 100 asset manager will receive an upfront payment of £140 million from Lloyds as final settlement.

“We are pleased with the settlement with LBG and believe that it represents a fair and positive outcome for both parties,” SLA’s chief executive Keith Skeoch commented in the statement. “We look forward to building on our relationship with LBG and continuing to deliver positive outcomes for their customers.”

SLA analyst ratings update

Deutsche Bank reaffirmed the asset manager as a ‘hold’ this month, without specifying a target on the Standard Life Aberdeen share price, while JPMorgan Chase & Co, which is ‘overweight’ on the shares, boosted its valuation on the stock from 350p to 360p. According to MarketBeat, the blue-chip group currently has a consensus ‘hold’ rating and an average price target of 315.10p.