Asset manager Abrdn has been forced to delay a shareholder vote on a £ 1.5bn transaction owing to a shortage of paper caused by international supply chain problems.
The FTSE 100 group will contact shareholders on Wednesday announcing the delay to vote on its proposed acquisition of retail funds platform Interactive Investor.
Abrdn had originally intended to complete the ballot before it announced annual results on March 1 – the first set of full-year numbers since chief executive Stephen Bird took the job in September 2020. A vote on the takeover will now be pushed back to mid- March.
The delay was first reported by Sky News.
“There have been shortages, and other companies expect to be hit as well,” Abrdn said. “We have such a big group of retail shareholders, and it’s not a small document to circulate.”
UK takeover rules, which were established in 1968, require that companies send paper versions of documents to all shareholders. The information on the Abrdn deal covers 120 pages and the group has about 1.1mn shareholders. The company has said the document will be issued this week.
Demand for paper has surged during the pandemic, with a boom in ecommerce and need for cardboard being exacerbated by container shortages and other transportation issues. Shortages and delays have been affected multiple groups including booksellers and publishers.
Dan Kemp, chief investment officer at Morningstar, warned that other groups need to communicate with shareholders may experience similar difficulties.
“We’re coming into proxy voting season later in the quarter, so we may see more [of this] happening then, ”he said. “This speaks to the inflationary pressures that everyone is focused on at the moment, though it’s tough to say how much is from increased demand and how much is from supply chain issues,” he said.
The deal to buy Interactive Investor is Bird’s biggest bet yet to transform the UK-based asset manager, which has £ 532bn in assets under management but has suffered from outflows and a depressed share price five years after its creation from Standard Life and Aberdeen.
Interactive Investor is the UK’s second-largest funds supermarket, with £ 55bn in assets under administration.
Abrdn believes the purchase will be crucial in transforming the asset manager in an era where fees are being squeezed and individuals are having to take greater responsibility for funding their retirements.
However, investors and analysts have mixed views on the deal’s prospects. HSBC analysts have described it as a “game changer”, but some top Abrdn shareholders have expressed reservations over the price and how it will be integrated.
Interactive Investor had been expected to list for between £ 1.5bn and £ 2bn before Abrdn stepped in to buy it in December.
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