SIPP and pensions provider STM Group has agreed in principle to a £41m takeover bid from Guernsey-based investment vehicle PSF Capital GP II Limited, better known as Pension SuperFund Capital.
STM said the boards of the two companies had reached an agreement on a possible 70p a share cash offer for STM shares.
The deal has yet to be formally approved by shareholders of both companies and the regulators.
STM, led by CEO Alan Kentish, owns SIPP firm Options, formerly Carey Pensions, and a number of other cross-border pensions interests.
According to Sky News, Pension SuperFund Capital (PSFC) is run by City financier Edi Truell, chairman of London-based Disruptive Finance Capital, who is believed to want to use STM for expansion in the pensions sector.
STM’s board says that should a firm offer be made for STM it would be “minded” to recommend it unanimously to STM Group’s shareholders.
As STM is a cross-border pensions provider the offer would be subject to the agreement of a number of regulators including the FCA, the Gibraltar Financial Services Commission, the Malta Financial Services Authority and The Pensions Regulator.
STM says Pension SuperFund Capital’s aim is to provide a “complete solution” to pension savers and members. STM says Pension SuperFund Capital also has access to significant lines of capital and assets.
PSFC has recently received further capital in preparation for “several significant pension risk transfers” and in anticipation of the potential re-launch of the Pension SuperFund, STM said.
PSFC is also the controlling shareholder of Long Term Assets, a vehicle intended to give pension savers access to private market investments through a listing on the London market.
STM says that while its board recommends the PSFC bid, discussions in relation to the possible offer are at a “very early stage” and there is no certainty that a takeover will go ahead.
STM is believed to have received a number of approaches.
STM owns a number of SIPP and SSAS businesses including Options and has acquired the SIPP and SASS book from Mercer.
In its latest annual financial results published in June CEO Alan Kentish said: “Whilst we have made progress with the underlying business performance as compared to 2021, new business growth has not been at the speed or levels that I would have wanted or expected.”
He said new business revenue for STM’s pensions businesses, particularly in the UK SIPP market, while “steady”, were below previous expectations.
The STM Group reported revenues of £24.1 million (2021: £22.4 million) in the year with profit before other items and tax of £3.3 million (2021: £2.8 million). The £1.7m increase in revenue was largely due to the acquisition of the Mercer books which contributed £0.8 million of revenue in the year, and revenue growth in its life companies of £1.5 million.
