- Invesco to acquire OppenheimerFunds for 81.9 mln shares of common equity and $4 bln in perpetual, non-cumulative preferred shares
- MassMutual is getting a 15.5% stake in the company to become Invesco’s largest shareholder.
- Invesco became a major player in the ETF business with its 2006 purchase of PowerShares.
Earnings were scheduled for:
Oct 24 BMO
Invesco reports EPS in-line, revs in-line; initiates $1.2 bln common stock buyback program, announces combination with OppenheimerFunds
- Reports Q3 (Sep) earnings of $0.66 per share, excluding non-recurring items, in-line with the S&P Capital IQ Consensus of $0.66; revenues fell 1.0% year/year to $966.9 mln vs the $972.49 mln S&P Capital IQ Consensus.
- Total assets under management (AUM) at September 30, 2018, were $980.9 billion (June 30, 2018: $963.3 billion), an increase of $17.6 billion during the third quarter. Long-term net outflows were $11.2 billion and total net outflows were $4.9 billion for the third quarter. As of July 1, 2018, we began including 100% of Invesco Great Wall Fund Management Company, which added $9.5 billion in AUM during the third quarter (the acquisition of the Guggenheim Investments' ETF business on April 6, 2018 added $38.1 billion in AUM during the second quarter).
- Invesco and MassMutual announced today that they have entered into a definitive agreement, whereby Invesco will acquire MassMutual's asset management affiliate, OppenheimerFunds, Inc. In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake.
Invesco to acquire OppenheimerFunds for 81.9 mln shares of common equity and $4 bln in perpetual, non-cumulative preferred shares
The co and Massachusetts Mutual Life Insurance Company (MassMutual) announced today that they have entered into a definitive agreement, whereby Invesco will acquire MassMutual asset management affiliate OppenheimerFunds, Inc. In turn, MassMutual and the OppenheimerFunds employee shareholders will receive a combination of common and preferred equity consideration, and MassMutual will become a significant shareholder in Invesco, with an approximate 15.5% stake.
- This strategic transaction will bring Invesco's total assets under management (AUM) to more than $1.2 trillion, making it the 13th-largest global investment manager and sixth-largest US retail investment manager1, further enhancing the company's ability to meet client needs through its comprehensive range of high-conviction active, passive and alternative capabilities.
- Under the terms of the agreement, Invesco will acquire OppenheimerFunds with consideration to MassMutual and OppenheimerFunds employee shareholders consisting of 81.9 million shares of Invesco common equity and $4 billion in perpetual, non-cumulative preferred shares with a 21-year non-call period and a fixed rate of 5.9%. The 81.9 million shares include approximately 6.6 million shares to be issued as a part of the post-closing conversion of unvested restricted stock awards, currently held by OppenheimerFunds employee shareholders, into Invesco restricted stock awards.
- The transaction is expected to be significantly accretive to Invesco's earnings per share with ~18% accretion for the three quarters in 2019 and ~27% accretion in 2020. Additionally, as part of an ongoing partnership between Invesco and MassMutual, the companies will explore future strategic collaboration opportunities.
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Asset management firms have been grappling with a shift in investors’ preferences as they flock to cheaper exchange-traded and index funds and away from active funds, which have lagged during much of the nine-year bull market. That has sparked a price war that is denting margins. Meanwhile, the way funds are sold is also changing as the advice industry moves from commissions-based to fee-based services, adding yet another challenge for fund firms.
