Transact has ditched potential plans to buy rival platform Nucleus, the third interested party to pull out the race for the firm since proposals were announced last month.

In a stock exchange announcement yesterday afternoon (January 4), Integrafin Holdings, Transact’s parent company, said it had “no intention to make an offer” for the adviser wrap platform.

The news has seen Nucleus’s share price tumble more than 6 per cent since markets opened this morning.

Last month (December 2), Nucleus confirmed that Integrafin Holdings and private equity firm Epiris, which owns James Hay, were in talks over proposing cash offers for the firm.

It had also received proposals from private equity house Aquiline Capital Partners and fund distribution platform Allfunds. Both have since confirmed they would not be making an offer for the firm.

Shares in Nucleus rose by more than a third (35 per cent) off the back of the initial news, from £1.35 to £1.80 a share. Today, shares cost £1.67.

Currently advice network Sanlam owns around 52 per cent of the adviser platform, but has said it was supportive of Nucleus engaging in a potential sale.

Nucleus said it would work constructively with Sanlam UK Limited to ensure that the “interests of all shareholders are properly considered”.

Earlier this year, Nucleus told FTAdviser it was aiming to be the top dog of platform technology in the UK by piling £3m a year into its technology department.

But the announcement came as its profits tumbled 64 per cent year-on-year, partly due to the fact the platform had decided not to cut back on expenditure after markets tumbled in March.

Nucleus has since brought its technology in-house by buying up certain assets of OpenWealth. It said the move would help it scale up its technology offering and, in turn, attract larger numbers.

Any buyout of Nucleus would not be against the grain of market trends, as the pace of merger and acquisitions activity in the platforms space has been on the up over the past few years.

Embark bought the advised business of Alliance Trust Savings and the Zurich platform while Ascentric was sold by Royal London to M&G.

Private equity firms have also been involved. Epiris bought James Hay and AnaCap Financial Partners has bought Wealthtime and the Novia platform.


Source: Financial Times

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