Our latest Sustainability in Action 2022 Report not only demonstrates how our sustainability investment philosophy and process works in practice, but it also demonstrates how the capital we manage for clients on your behalf has a tangible, real-world impact.
This report covers the investment team’s approach across their capabilities including how we:
<ul>
	<li>Prioritise quality engagements, eschew box-ticking, preferring direct and targeted engagements with our portfolio companies to drive change</li>
	<li>Maximise the influence we can have by voting thoughtfully and without favour</li>
	<li>Set key metrics under our three pillars of sustainability to monitor company progress.</li>
</ul>
Download your copy of our Sustainability in Action 2022 Report below.

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Sustainable Investment Philosophy & Process in Action

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R&amp;M’s Independent Directors1 are pleased to announce that they have reached agreement with AssetCo on the terms and conditions of a recommended all-share acquisition by AssetCo of the entire issued and to be issued ordinary share capital of R&amp;M other than the R&amp;M shares already beneficially owned by AssetCo (the "Acquisition").
It is intended that the Acquisition will be implemented by way of a court-sanctioned scheme of arrangement (although AssetCo reserves the right to effect the Acquisition by way of an Offer, subject to the consent of the Panel and the terms of the Cooperation Agreement). The conditions to, and certain other terms of, the Acquisition are set out in the full RNS announcement. The conditions include the completion of the Solutions Sale to Schroders, the return of £190 million to R&amp;M Shareholders by way of the Return of Capital, the AIM Admission Condition and the FCA Condition, as set out in Part 1 of Appendix 1 to the RNS announcement. The Scheme is expected to become effective during the second quarter of 2022.
Key terms of the Acquisition
<ul>
	<li>Under the terms of the Acquisition, holders of R&amp;M Shares will be entitled to receive:</li>
</ul>
0.07392 New AssetCo Shares in exchange for each R&amp;M Share
<ul>
	<li>The Acquisition is conditional on, among other things, the Solutions Condition and the Return of Capital Condition, as further described in paragraph 14 of the RNS announcement.</li>
	<li>Based on the Closing Price of 1,550.0 pence per AssetCo Share on 24 January 2022 (being the last Business Day before the date of this announcement), the Acquisition values each R&amp;M Share at 114.6 pence and R&amp;M's entire issued and to be issued ordinary share capital at approximately £98.8 million, and the Acquisition and the Return of Capital, taken together, value each R&amp;M Share at 334.9 pence and R&amp;M's entire issued and to be issued ordinary share capital at approximately £289 million.</li>
	<li>The Return of Capital will be implemented by either the B Share Scheme or a combination of the Tender Offer and the Tender Offer Special Dividend. If the Return of Capital is implemented by way of the combination of the Tender Offer and the Tender Offer Special Dividend, the Exchange Ratio will be adjusted to reflect that there will be fewer R&amp;M Shares in issue following completion of the Tender Offer. If the Return of Capital is implemented by way of the B Share Scheme, there will be no consequential adjustment to the Exchange Ratio, as the B Share Scheme will not affect the number of R&amp;M Shares in issue.</li>
	<li>Following completion of the Acquisition, R&amp;M Shareholders will own approximately 41.6% of the Combined Group2.</li>
	<li>If R&amp;M announces, declares or pays any dividend or any other distribution to R&amp;M Shareholders on or after the date of this announcement (other than a dividend on the B shares if the Return of Capital is implemented by way of the B Share Scheme, or the Tender Offer Special Dividend if the Return of Capital is implemented by way of the combination of the Tender Offer and the Tender Offer Special Dividend), AssetCo reserves the right to make an equivalent reduction in the terms of the Acquisition.</li>
</ul>
Commenting on the Acquisition, Jonathan Dawson, Chairman of River and Mercantile Group PLC said:
“The board believes that the offer from AssetCo not only represents good value to shareholders, but provides our clients and colleagues with a powerful investment platform led by a team with deep experience in the asset management industry. The board encourages our shareholders to support this transaction as the board will be doing in respect of their own holdings.
Taking this transaction and the sale of Solutions to Schroders together, we will have delivered total value to shareholders of £289 million, or £3.35 per share – a significant premium to the group’s undisturbed share price last Summer. This confirms the board’s view that the market was undervaluing R&amp;M and validates the steps we have taken to realise value for our investors.”
James Barham, Group Chief Executive Officer of River and Mercantile said:
“At R&amp;M we have built a successful and high performing asset management business based on the hard work and performance of my colleagues, and the trust and confidence of our valued clients. This transaction secures continuity of the environment and investment culture that has been a critical factor to the success of the business and provides stability and support as the business continues to invest for the future. AssetCo is building an impressive platform with experienced leadership and this acquisition is a key element in their exciting plans.”
R&amp;M Recommendation
R&amp;M’s Independent Directors, who have been so advised by Lazard and Fenchurch Advisory Partners as to the financial terms of the Acquisition, consider the terms of the Acquisition to be fair and reasonable.
In providing their advice to R&amp;M’s Independent Directors, Lazard and Fenchurch Advisory Partners have taken into account the commercial assessments of R&amp;M’s Independent Directors. Lazard and Fenchurch Advisory Partners are providing independent financial advice to R&amp;M’s Independent Directors for the purposes of Rule 3 of the Takeover Code.
Accordingly, R&amp;M’s Independent Directors intend to recommend unanimously that Scheme Voting Shareholders vote or procure votes in favour of the Scheme at the Court Meeting and R&amp;M Shareholders vote or procure votes in favour of the R&amp;M Resolutions at the R&amp;M General Meeting.
The background to and reasons for the recommendation
R&amp;M’s Independent Directors consider that the Acquisition represents an attractive financial proposition for R&amp;M Shareholders. The Acquisition represents the final step in the strategy to unlock value from the R&amp;M Group, which commenced with the Solutions Sale and has included conversations with multiple parties regarding a possible offer for R&amp;M, as announced by R&amp;M on the 23 November 2021.
This process will deliver total value to R&amp;M Shareholders of £288.8 million, or £3.35 per share, comprising:
<ul>
	<li>a return of capital of £190 million, or £2.20 per R&amp;M Share, funded from the proceeds of the sale of Solutions and being higher than the £180 million originally announced; and</li>
	<li>a number of shares in AssetCo for each R&amp;M Share held, as determined by the Exchange Ratio (see Section 14 of the RNS announcement), representing a value of £98.8 million, or 114.6 pence per R&amp;M Share, based on the Closing Price of 1,550.0 pence per AssetCo Share on 24 January 2022 (being the last Business Day before the date of this announcement).</li>
</ul>
This represents a premium of:
<ul>
	<li>59% to the undisturbed share price on 9 August 2021 of £2.10 per R&amp;M Share;</li>
	<li>17% to the share price on 22 November 2021, being the day immediately before the start of the offer period, of £2.85 per R&amp;M Share; and</li>
	<li>13% to the latest share price of £2.96 per R&amp;M Share – given that a large proportion of the current share price is underpinned by the expected net proceeds from the sale of Solutions, R&amp;M’s Independent Directors consider this to be an attractive premium for shareholders.</li>
</ul>
R&amp;M’s Independent Directors also consider that the implied value for the asset management franchise (excluding the return of capital and surplus capital retained in the business) is attractive when compared to precedent transactions for businesses of a similar scale in AuM and revenues, in particular when taking into account the latest run-rate financial profile of the business (See Section 8 of the RNS announcement). Moreover, R&amp;M Shareholders will have the opportunity to participate in continued value creation through a 41.6% equity stake in the Combined Group, including from the investments AssetCo has made in various high growth operating businesses; ongoing development of R&amp;M’s PVT and Infrastructure investment franchises, where there is no overlap with AssetCo’s existing business; and scope to achieve central cost savings as part of AssetCo, in particular relating to the stranded costs arising as part of the sale of Solutions. In forming this conclusion, R&amp;M’s Independent Directors have taken into account findings from a due diligence exercise completed on AssetCo, using third party advisers. This was focused on AssetCo’s latest trading and financial performance, as well as an assessment of its medium-term growth prospects, and included access to non-public financial and commercial information.
R&amp;M’s Independent Directors also consider that the combined company will benefit from a leadership team with deep experience in the asset management industry, which has committed to building a range of best in class capabilities designed to address customer needs while preserving the existing strengths and investment culture of R&amp;M’s business.
&nbsp;
1R&amp;M’s Independent Directors means the Board of R&amp;M save for Martin Gilbert given his position as Chairman of AssetCo. 
2Combined Group means the combined R&amp;M and AssetCo groups.
Ends

Recommended Offer for R&M by AssetCo Plc

River and Mercantile Investments Limited and River and Mercantile Asset Management LLP have both been accepted by the Financial Reporting Council (FRC) among its first set of signatories to the UK Stewardship Code 2020, published today.
The UK Stewardship Code 2020 replaces the Stewardship Code 2012 in setting out best practice principles on stewardship for asset managers and asset owners. It requires signatories to go substantially beyond the legal and regulatory minimum, setting out twelve “apply and explain” principles.

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Done properly, successful stewardship and engagement can be a source of investment alpha and achieve net environmental, societal or governance benefits by encouraging companies to make positive changes.

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We recognise the trust our clients place in us and the importance of our responsibility as stewards of our clients' assets. The UK Stewardship Code 2020 raises the bar for stewardship across the UK investment industry, and therefore we are delighted that our approach and the actions we are taking on behalf of our clients has been recognised by the FRC.
For more details, our annual reports detailing our approach to voting and stewardship can be accessed by the link below.

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