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RBC to Acquire BlueBay Asset Management
RBC Wealth Management continues to expand asset management capabilities
TORONTO and LONDON, October 18, 2010 —
Royal Bank of Canada (RY on TSX and NYSE) and BlueBay Asset
Management plc (BBAY on LSE) today announced that their respective
boards have reached an agreement on terms for a recommended
acquisition of BlueBay by RBC.
Under the terms of the acquisition, BlueBay shareholders
will be entitled to receive 485 pence in cash for each BlueBay
share. This represents a premium of 29 per cent to the last
closing price of BlueBay shares, as at Friday, October 15,
2010. The acquisition values the issued share capital of BlueBay
at approximately £963 million (C$1.56 billion). It is
expected that the acquisition will be implemented by way of
a court-approved arrangement and that formal documentation
will be sent to BlueBay shareholders in November 2010.
The Board of BlueBay has unanimously recommended that its
shareholders vote in favour of the acquisition. It is anticipated
that, subject to the satisfaction of all regulatory and other
conditions, the acquisition will close by the end of December
2010. The transaction will be funded using RBC's existing
cash resources, and is not expected to have a material impact
on RBC's earnings per share in the near term.
BlueBay is one of Europe's largest independent managers of
fixed income debt funds and products, with US$40 billion in
assets under management (as at September 30, 2010) on behalf
of institutional and high net worth investors in the UK, Europe,
the U.S., the Middle East, Asia and Australasia. Based in
London, BlueBay manages a combination of long-only and alternative
investment strategies across the sub-asset classes of fixed
income credit - primarily focused on European and emerging
markets strategies - including: investment grade corporate
debt, high yield corporate debt, emerging market debt, convertible
bonds, distressed debt, and multi-strategy debt capabilities.
In order to best serve its clients, BlueBay will retain its
investment autonomy and related operational independence following
the acquisition. The 220 employees of BlueBay will become
valued members of RBC's Global Asset Management business and
collaborate with their new partners in RBC Wealth Management,
RBC's global segment for wealth and asset management solutions.
"This acquisition will further RBC's strategy to leverage
our position as a top 10 global wealth manager, and continue
to expand our asset management solutions for the benefit of
our clients around the world," said George Lewis, group
head, RBC Wealth Management. "BlueBay is an ideal fit
with RBC's growing asset management business and we are confident
that this transaction will benefit clients, employees and
shareholders of both firms."
"Both management teams are excited by a shared vision
of investment performance excellence and the exceptional growth
opportunities which a combination of our two firms offers,"
said John Montalbano, CEO of RBC Global Asset Management.
"We believe this to be a uniquely positive transaction
for the clients and employees of both our organizations."
"Our board is unanimously recommending this combination
with RBC because of the clear benefits it affords the firm's
shareholders, clients and employees," said Hans-Jörg
Rudloff, chairman of BlueBay.
"RBC's strength and stability make it an ideal partner
for BlueBay," said Hugh Willis, CEO of BlueBay. "Its
commitment to its clients and its high standards of business
practices mirror our own and lie at the heart of the excellent
cultural fit between our firms. We greatly look forward to
working together in providing our clients with world class
investment solutions."
Today's announcement follows RBC Wealth Management's announcement
in September that it will be moving from three geographic
wealth management businesses to four (Canada, United States,
UK and Emerging Markets), that it aims to replicate the success
achieved in the Ultra High Net Worth segment in Canada across
international markets, and, establish a Global Trust business
- highlighting its world-class trust capabilities. RBC Wealth
Management's continued focus on leveraging the capabilities
and expertise of its most profitable business, RBC Global
Asset Management, to drive further growth, is reinforced through
today's announcement.
A conference call is scheduled to take place on October 18,
from 8:30 a.m. to 9:00 a.m. (ET) / 1:30 p.m. to 2:00 p.m.
(BST) and will feature a presentation followed by a brief
question and answer period with analysts. Interested parties
can access this call live on a listen-only basis via telephone
at: +1-416 695-7806 or 1-888-789-9572, passcode 3843540#.
Please call between 8:20 a.m. and 8:25 a.m. (ET).
A recording of the conference call will be available after
9:00 a.m. (ET) / 2:00 p.m. (BST) on October 18 until Jan 18
via telephone at:
+1-416-695-5800 or 1-800-408-3053, passcode 3081068#.
Information related to this announcement will be available
at: www.rbc.com/investorrelations.
About RBC Global Asset Management and
RBC Wealth Management
RBC Global Asset Management (RBC GAM) comprises RBC Asset
Management Inc. (RBC AM), Phillips, Hager & North Investment
Management Ltd. (PH&N) and RBC Global Asset Management
(U.S.) Inc. The group of companies forms the asset management
division of Royal Bank of Canada (RBC), a global institution
with the reputation of stability and strength. RBC GAM group
of companies manage approximately C$200 billion in assets,
including over C$100 billion in IFIC-reported mutual fund
assets in Canada. PH&N won the Lipper Awards for "Best
Overall Fund Group" in 2010 and "Best Bond Fund
Family" in 2007, 2008 and 2010; RBC AM won the Lipper
Awards for "Best Bond Fund Family" in 2009 and "Best
Overall Fund Group" in 2007 and 2008. Website: www.rbcgam.com.
RBC Global Asset Management is part of RBC Wealth Management
which directly serves affluent and high net worth clients
in Canada, the United States, Latin America, Europe and Asia.
RBC Wealth Management provides integrated and diversified
international wealth management expertise and solutions, asset
management and trust services to high net worth individuals
and to corporate and institutional clients. Services provided
by RBC Wealth Management consultants, advisors, private bankers
and trust officers include trust and estate planning, tax
advice, discretionary investment management and investment
advisory services, structured solutions, banking, lending
and global custody. RBC Wealth Management has more than C$500
billion of assets under administration, over C$250 billion
of assets under management and more than 4,300 financial consultants,
advisors, private bankers and trust officers.
About BlueBay Asset Management
Founded in 2001, BlueBay Asset Management plc provides investment
management services primarily to institutional investors and
manages a combination of long-only and alternative products
across the sub-asset classes of investment grade corporate
debt, high yield corporate debt, emerging market debt, convertible
bonds, distressed debt and multi-strategy debt strategies.
Based in London with satellite offices in Stamford and Tokyo,
BlueBay Asset Management plc is one of the largest independent
managers of fixed income debt funds and investment solutions
in Europe, with approximately US$40.0 billion of assets under
management (as at September 30, 2010).
Listed on the London Stock Exchange since
November 2006, BlueBay is a constituent of the FTSE 250. Website:
www.bluebayinvest.com.
Important notice
This announcement is not intended to and does not constitute
an offer to sell, or form part of, or constitute the solicitation
of an offer to purchase or subscribe for or an invitation
to purchase, any securities. The acquisition of BlueBay will
be made solely by means of a court-approved arrangement which
will contain the full terms and conditions of the acquisition.
BlueBay shareholders are advised to read the formal documentation
in relation to the acquisition carefully, once it has been
dispatched.
Perella Weinberg Partners UK LLP and RBC Capital Markets,
which are authorized and regulated in the United Kingdom by
the Financial Services Authority, are acting as joint financial
advisers to RBC in connection with the acquisition and are
not advising any other person or treating any other person
as their client in relation thereto and will not be responsible
to anyone other than RBC for providing the protections afforded
to their clients, or for giving advice to any other person
in relation to the acquisition, the contents of this announcement
or any other matter referred to herein.
Forward looking statements
Certain statements contained in this announcement may be deemed
to be "forward-looking statements" under certain
securities laws, including the "safe harbor" provisions
of the United States Private Securities Litigation Reform
Act of 1995 and any applicable Canadian securities legislation.
These forward-looking statements include, but are not limited
to, statements about the expected effects of the acquisition
of BlueBay, the expected timing and scope of the acquisition
and other statements other than in relation to historical
facts. Forward-looking statements are typically identified
by words such as "believe", "expect",
"foresee", "forecast", "anticipate",
"intend", "estimate", "goal",
"plan", and "project" and similar expressions
of future or conditional verbs such as "will", "may",
"should", "could", or "would".
By their very nature, forward-looking
statements require us to make assumptions and are subject
to inherent risks and uncertainties, which give rise to the
possibility that our predictions, forecasts, projections,
expectations or conclusions will not be achieved. BlueBay
and RBC caution readers not to place undue reliance on these
statements as a number of important factors could cause our
actual results to differ materially from the expectations
expressed in such forward-looking statements. These factors
include, but are not limited to, the satisfaction of the conditions
to the Acquisition and additional factors, such as: local
and global political and economic conditions; foreign exchange
rate fluctuations and interest rate fluctuations (including
those from any potential credit rating decline) and legal
or regulatory developments and changes. Other unknown or unpredictable
factors could cause actual results to differ materially from
those in the forward-looking statements. We caution that the
foregoing list of important factors is not exhaustive. Neither
BlueBay nor RBC undertake any obligation to update publicly
or revise forward-looking statements, whether as a result
of new information, future events or otherwise, except to
the extent legally required.
Media Enquiries:
RBC
Europe & Asia:
Dafina Grapci-Penney, +44 (0) 207 680 5052,
dafina.grapci-penney@greentarget.net
Phillippa Cantrill, +44 (0)20 7680 5063, phillippa.cantrill@greentarget.net
U.S. & Canada:
Gillian McArdle, +1 416 974 5506, gillian.mcardle@rbc.com
Investor Relations:
Josie Merenda, RBC, 416 955 7803, josie.merenda@rbc.com
Karen McCarthy, RBC, 416 955 7809, karen.mccarthy@rbc.com
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