The Abrdn (LON: ABDN) share price will be in focus on Monday. This is after news emerged that the company was considering making an acquisition of Interactive Investor, a leading UK broker. The stock ended Friday at 255p, where it has been in the past few days.
Abrdn to acquire Interactive Investor
Abrdn, formerly known as Standard Life Aberdeen, is in talks to acquire Interactive Investor, the second-biggest stockbroker in the UK. The price tag, according to the Financial Times, will be 1.58 billion pounds.
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This will be the biggest deal by the company since the Standard Life and Aberdeen merger a few years ago. Abrdn confirmed that talks were ongoing. At the same time, Interactive Investor insisted that a deal was not reached yet and that it could opt to go public instead.
If the deal is closed, it will deepen Abrdn’s product range to include individual stock investors. Interactive Investor has about 400k customers in the UK and more than 55 billion pounds in assets.
This acquisition comes at a time when the asset management and brokerage industry are seeing rapid change. For one, asset managers have been in a major wave of corporate consolidation.
At the same time, the stock brokerage industry has been disrupted by the likes of Robinhood. There has also been consolidation in the industry. For example, Morgan Stanley has already acquired E*Trade while Schwab has merged with TD Ameritrade. A few months ago, IG Group bought TastyWorks, a company that offers options trading.
In the past, the Abrdn share price has lagged those of other comparable companies. Its stock has crashed by about 15% while its investment products have seen outflows. In the first half of the year, the company announced that its pretax profit rose to 163 million pounds, a 77% jump from the same period last year. Its outflows declined to 532 billion pounds.
Abrdn share price forecast
The Abrdn share price has been in a narrow range in the past few days. The stock is trading at 255p, where it has been recently. As a result, the stock is along the 25-day and 50-day moving averages.
It is unclear where the stock will open on Monday. But, a closer look shows that it has formed a bearish flag pattern that is shown in black.
Therefore, there is a possibility that the shares will break out lower as bears attempt to push it below the support at 255p.
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