Wealth manager Americana Partners bid $25 a share for Westwood Holdings Group

Westwood Holdings

14/07/2021 20:20

(Updates with comment from Westwood)
    By Svea Herbst-Bayliss
    BOSTON, July 14 (Reuters) - Wealth manager Americana
Partners has made a $25 a share bid for Westwood Holdings Group
 WHG.N , offering a nearly 28% premium to take the publicly
traded financial advisory and mutual fund firm private, sources
familiar with the matter said.
    Westwood said in a statement it had reviewed two bids from
Americana, including the one for $25 per share, and are
rejecting both. The bids are too low and executives are not
certain that Americana would be able to finance the transaction,
it said.
    Houston-based Americana made the all-cash offer for
Westwood, which is based in Dallas and has roughly $15 billion
in assets under management, last month, the sources said.
    News of the unsolicited bid sent Westwood's stock up as much
as 19% on Wednesday, leaving it to trade at $23.30 by early
afternoon.
    A representative for Americana declined to comment.
    Including Wednesday's jump, Westwood's stock price has
climbed some 63% since January. But Americana believes that
Westwood has produced negative returns over three- and five-year
periods. Americana also believes Westwood could perform better
out of the spotlight of the public markets, the people said.
    Americana wants to expand across Texas and sees potential in
Westwood's wealth and trust businesses, the sources said.
    The bid was made shortly after Westwood's largest investor,
James C. Pappas' JCP Investment Management, which owns 10.37% of
Westwood, began pushing management and the board more publicly
to consider alternatives for the firm, including a sale.
    In a regulatory filing in April, Pappas said that he
intended to speak with management and the board about strategic
options.
    A representative for JCP declined to comment.
    Westwood chief executive officer Brian Casey said on
Wednesday that cost cuts and investments in technology are
paying off, however.
    "Westwood is now on a more clear path to growth," Casey said
in the statement. "We are even more confident in our ability to
carry out our current plan."   
    A wave of consolidation has hit the asset management and
wealth management industry at a time when low interest rates and
investor preferences for inexpensive index funds have made it
tougher for stand-alone firms to compete with rivals such as
BlackRock, the world's biggest asset manager.
    Legg Mason was acquired by Franklin Resources last year and
Eaton Vance was purchased by financial services company Morgan
Stanley this year. 
    Last year was record-setting for wealth sector deals, with
more than 200 completed, according to research firm Echelon
Partners.
    Americana Partners, which has offices in Houston, Dallas and
Austin, was formed in 2019 when its principals spun off from
Morgan Stanley  MS.N . 
    It has roughly $4.5 billion in assets under management.

 (Reporting by Svea Herbst-Bayliss; editing by Jason Neely and
Sonya Hepinstall)
 ((svea.herbst@thomsonreuters.com; +617 856 4331; Reuters
Messaging: svea.herbst.thomsonreuters.com@reuters.net))