Lloyds Sells Entire Standard Life Aberdeen Stake Amid Tussle

(Bloomberg) -- Lloyds Banking Group Plc sold its remaining 3.3 percent stake in Standard Life Aberdeen Plc, the money manager with which it’s locked in arbitration over a large asset management mandate.

The London-based bank raised 344 million pounds ($462 million) in the stock offering to institutional investors, according to statements on Friday and late Thursday, in a sign that relations between the two companies are worsening.

Aberdeen and Standard Life merged last year with the intention of creating a $1 trillion money manager, a plan that’s been dealt a significant blow by Lloyds’s decision to pull money from the firm. Lloyds is withdrawing 109 billion pounds because it claims that the merger created a competitor to the lender’s own insurance unit. Standard Life, which is getting out of the insurance business, argues the bank doesn’t have the right to pull the money, though it suggested there may be little it can do.

“I’ve taken a view that the Lloyds assets are going,” Standard Life Co-Chief Executive Officer Martin Gilbert said in an interview last month. “We’re still in discussions. It’s always difficult when friends fall out. Lloyds have been a great long-term supporter of the legacy Aberdeen business and were very supportive of our merger with Standard Life.”

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The arrangement between the two companies, which will end by the first half of 2019 unless the decision is reversed, was a legacy of Aberdeen’s acquisition of Scottish Widows Investment Partnership from Lloyds in 2013. That made the lender one of Aberdeen’s biggest shareholders in addition to being a competitor.

Lloyds is holding a contest among fund managers interested in overseeing the money. The bank is likely to allocate the funds to several firms after the contract with Standard Life expires in June of next year, Bloomberg News reported in April.

Lloyds sold the Standard Life Aberdeen shares at 352.5 pence apiece, it said. Standard Life Aberdeen shares closed on Thursday at 364 pence, valuing the company at 10.8 billion pounds. Bank of America Corp. managed the sale.

©2018 Bloomberg L.P.

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