Westwood Holdings Group, Inc. (WHG) stock prices were up 19.79% some time after market trading commenced on July 14th 2021, bringing the price per share up to USD$23.43 early on in the trading day.
Americana’s Bid
July 14th, 2021 saw Americana Partners wealth manager make a USD$25 a share bid for WHG, representing a massive 28% premium to acquire the publicly traded financial advisory and mutual fund firm and turn it into a private company. The all-cash offer for the company by Americana will see the acuiqisiont of approximately USD$15 billion in assets under its management as of June 2021. With the company being valued at almost USD$165 million, WHG has not yet engaged with Americana.
Americana’s Motivation
While the company’s stock price rose by an impressive 37% since January, Americana believes that the company has produced negative returns over the past three and five-year periods. Americana also maintains that the company could benefit from being out of the spotlight of public markets, facilitating better financial performance and returns on shareholder investments.
Building Towards the Merger
Based out of Houston, Americana has plans to expand its scope across Texas. To facilitate this expansion, it is eyeing the company’s wealth and trust businesses, which it hopes to incorporate into its efforts. The bid came shortly after JCP Investment Management, the company’s biggest investor, began to pressure WHG management and leadership to consider alternatives for the company, including a sale, more publicly.
Scope of Merger
A regulatory filing from April 2021 saw the owner of JCP, which owns 10.37% of WHG, report his intentions to communicate with management and the board in regard to strategic options available to them. 2020 set records for the wealth sector, with more than 200 deals being reported to have been completed. Americana came into existence in 2019 when its principals spun off from Morgan Stanley. The company has roughly USD$4.5 billion in assets under its management.
Future Outlook for WHG
Armed with a potential merger that will see the company’s equity value skyrocket, WHG is poised to capitalize on the confidence inspired by Americana’s bid. Current and potential investors are hopeful that management will be able to leverage its resources and expertise in order to make an effective strategic decision for the company that will ensure long-term and organic returns to shareholder investments.
