Wealth management group Tilney has confirmed it is in talks with fund firm Smith & Williamson in a move that would result in a firm with a combined £45bn in assets under management.
The deal, first reported by The Sunday Times, would see Tilney, which is backed by private equity firm Permira, succeed in a bid that failed once already in 2017. Then, Tilney had launched a rival bid for Smith & Williamson after it was reported Rathbones had begun merger talks.
According to the Financial Times this new deal would create a business with around 250 financial planners, on top of 240 investment managers. Tilney owns online service Bestinvest, but the deal would also expand Tilney's range services into a wider set of tax advice and financial planning services. Tilney would also add Smith & Williamson's £21bn in assets to the £24bn it has under management.
A merger has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm"
Tilney said the discussions are exclusion and ongoing, and there can be no certainty a deal will go ahead. The fund supermarket said a further announcement would be made "as and when appropriate".
Smith & Williamson said: "A merger has the potential to deliver significant benefits to the clients, employees, partners and shareholders of both businesses and create a market-leading, integrated, UK wealth management and professional services firm."
In 2017 Smith & Williamson held an unsuccessful round of merger talks with wealth manager Rathbones. Tilney launched an alternative bid, but Smith & Williamson chose instead to pursue a deal with Rathbones that ultimately collapsed.
Following the failed tie-up talks with Rathbones, Smith & Williamson publicly committed itself to a stock market listing by 2020. Sources with knowledge of the talks said it was too early to say if a combined firm would pursue a flotation.
Tilney has grown by acquisition in recent years, particularly through buying up Towry in 2016. In 2017, Tilney named Chris Woodhouse as chief executive to replace veteran Peter Hall, who left to join Permira as an adviser.
Tilney was acquired by private equity firm Permira from Deutsche Bank in 2014.