The revised offer follows two extensions to negotiations following the initial proposed offer in July.

Pension SuperFund Capital has lowered its offer for STM Group from £0.70 per share to £0.67 per share.

The deal has yet to be concluded and negotiations have been extended for a third time to 8 September. The revised offer is also conditional on the sale of “parts of the group that are non-core to the strategy of Pension SuperFund”.

As part of the revised terms, STM Group chief executive Alan Kentish has agreed to acquire certain parts of the group, comprising the UK self-invested personal pension (Sipp) businesses and the businesses connected with and including the master trust.

Pension SuperFund Capital will need to make a firm offer or leave the table before 8 September unless the deadline is extended by STM.

An independent committee of the board of STM Group, comprising Nigel Birrell, Peter Smith and Therese Neish, has been formed to consider the revised possible offer and the proposed disposal.

The offer is valued at a price of 70 pence per share.

The board of STM Group has confirmed to Pension SuperFund Capital that, should a firm offer be made on the financial terms of the offer, it would recommend it unanimously to STM Group’s shareholders.

Any offer made would be subject to the agreement of other customary terms and conditions, including the approval of the Financial Conduct Authority (FCA), the Gibraltar Financial Services Commission (GFSC), the Malta Financial Services Authority (MFSA) and The Pensions Regulator (TPR).

The STM board has granted Pension SuperFund Capital access to due diligence materials.

The firms said that discussions are at a very early stage. There is “no certainty that any offer will ultimately be made for the company”. STM said further announcements “will be made as appropriate”.

STM has a range of life and pension subsidiaries in the UK, Malta, Spain and Gibraltar. PSF provides pension savings and pension risk transfers. PSF is the controlling shareholder in Long Term Assets, a vehicle intended to give pension savers access to private market investments through a listing on the London market.

This was a 33% rise from £1.2m the year before.

The group also announced revenues of £24.1m (2021: £22.4 million). This £1.7m increase in revenue was “largely due to the acquisition of the Mercer books”, which contributed £800,000 of revenue in the year, and revenue growth in the life companies of £1.5m.

The sale of the corporate trustee service companies in 2021, which contributed £800,000 of revenue that year, account for the balance in this movement.

Recurring annual revenue has continued to be a significant portion (92%) of the total revenues achieved.

The results come after the firm announced that the Gibraltar financial regulator has not yet given approval for a managing director to join two of its subsidiaries. This regulatory setback had impacted the firm’s ability to release the 2022 financial results.

Speed

Alan Kentish, chief executive at STM Group, said: “Whilst we have made progress with the underlying business performance as compared to 2021, new business growth has not been at the speed or levels that I would have wanted or expected.

“Our new business revenue for our pensions businesses, particularly in the UK self-invested personal pension (Sipp) market, whilst steady was below our previous expectations, with reliance being placed on a number of strategic partners that have not, as yet delivered new business in line with those previous expectations. Our UK personal pensions business saw organic growth of circa 9% in terms of new Sipp policies, but this was offset by similar levels of attrition.

“This general shortfall was somewhat compensated for by an uplift in new business in the Gibraltar based life assurance businesses, and in particular in relation to the short-term annuity product. The acquisition of the Sipp and Ssas book from Mercer in September 2022 was however particularly pleasing.

“We also continue to see increased activity from intermediaries in the form of illustrations for our flexible annuity products issued from our Gibraltar life companies, albeit the lead time to receiving applications remains frustratingly slow.

“During 2022 and into 2023, there has been significant changes to the senior leadership team as well as the Plc board. These changes have included a new managing director for both the Malta and Gibraltar businesses, the redundancy of our dedicated acquisition resource, and the appointment of a new head of business development.

“In addition, there has been a change of chairman and of the independent non-executive directors at Plc level. I would like to thank all of the above individuals for their contributions to STM over the years.”

STM said in a stock exchange announcement on 4 May that there were a number of planned and unplanned changes in the management team and compositions of the boards of the London & Colonial Assurance PCC and STM Life Assurance in the second half of 2022. The changes needed regulatory approval from the Gibraltar Financial Services Commission (GFSC).

The GFSC said to STM that the companies “may not be meeting the threshold conditions for regulated individuals under Section 65 of the Financial Services Act”.

STM said that “no action has been taken by the GFSC” and the subsidiaries have been working closely with the Gibraltar regulator to obtain the approvals.

The firm added: “As at today, only the role of managing director for each of the life company subsidiaries is still awaiting regulatory approval, although he is in place and has been acting in an interim capacity for the last eight months. This will remain the case until the GFSC approves the application or otherwise.”

Going forward

STM said the individual has been performing the regulated function while awaiting official regulatory approval from the GFSC as “allowed for in the Financial Services (Insurance Companies) Regulations 2020”.

The board and the directors of the subsidiaries have “remained satisfied throughout this period, that this is the most appropriate course of action, given the circumstances”.

Although Gibraltar legislation “does allow for individuals to perform regulated roles while waiting for GFSC approval”, there “remains a level of uncertainty as to whether the GFSC will approve this application”, the firm said.

“Should the GFSC decide not to approve the application and in the event that no suitable alternative individual is put forward by the subsidiaries then that would have a technical impact with regards to the subsidiaries operating as going concerns, solely from a regulatory perspective.”

The STM board is “confident that this scenario is highly unlikely to materialise as if the individual in question is not approved an alternate candidate will be put forward by the subsidiaries to fill the regulated role”.

STM added: “The board is not aware of any other regulatory matters which would impact the going concern assessment and are confident in the ability of the current boards and management teams of the life company subsidiaries including the individual pending regulatory approval. Furthermore, the board remains confident in the subsidiaries’ ability to continue as a going concern from a business perspective.”

This issue has meant that audited accounts for the life subsidiaries will be delayed until an expected sign off next week. The group’s audited financial statements for the year ended 31 December 2021 were published on 8 June 2022.

Strategic review

Also in the statement, STM said that its strategic review is “progressing well with the external advisers engagement now complete”.

The review covered “both market insights and opportunities as well as operational efficiency levers”.

In addition to providing a series of recommendations, the advisers have also delivered a set of guiding principles for the group.

STM said: “The board are considering the various options and recommendations made by the advisers and expects to update with its conclusions at the time of the results in June 2023.”

The firm expects to announce its results for year ended 31 December 2022 in June 2023.

Board update

Also, Therese Neish’s 12-month contract as interim chief financial officer will come to an end in early October and STM has begun the process to find her replacement.

It added: “A further update on this will be provided in June. Therese will remain on the board to oversee the audit and sign the financial statements and thereafter will resign from the board, expected to be on or around 1 July 2023.

“The process to find another non-executive director to replace Graham Kettleborough continues and a further update on this will be made in due course.”

The regulator has appointed Kenneth Farrugia as chief executive, with effect from 12 April 2023.

Farrugia was previously director general at the Internal Audit and Investigations Department (IAID) and as director of the Financial Intelligence Analysis Unit (FIAU).

He takes over from Michelle Buontempo, who held the position of acting chief executive for the past months.

Nomura

The banking group has appointed Rudolf Hitsch as head of north Asia for its international wealth management business.

In this newly created role, Hitsch will be based in Hong Kong and responsible for international wealth management’s client relationship management teams covering north Asia.

Hitsch was head of north Asia at Citi Private Bank.

Marlborough

The DFM firm has named Danny Knight as commercial director and Nathan Sweeney as chief investment officer of multi-asset.

Knight will have an initial focus on further strengthening Marlborough’s multi-asset investment proposition for financial advisers in the UK and internationally.

He joins from Quilter Investors, where he was a director of multi-asset and latterly head of investment proposition.

Sweeney’s appointment follows the promotion of Sheldon MacDonald to chief investment officer in January.

He joined Marlborough as deputy chief investment officer of multi-asset in 2021.

Capital Group

The asset manager has hired Arne Toelsner as head of client group for Germany, Switzerland, and Austria, effective immediately.

He was most recently as head of distribution for Germany, Switzerland, and Austria at Allianz Global Investors.

O-IM

The investment manager has named Tom Hind as a business development director.

Hind joins O-IM from Stellar Asset Management.

Reyl Intesa Sanpaolo

The banking group has appointed Richard Albrecht as head of wealth management.

Prior to joining Reyl Intesa Sanpaolo, he was head of French-speaking Switzerland as a member of the WM European committee at Deutsche Bank.

Evelyn Partners

The wealth management and professional services group has bolstered its Edinburgh office with the appointment of Duncan Arthur as financial planning director.

He joins from Blackadders Wealth Management in Dundee where he was director of financial planning.

Impax Asset Management

The specialist asset manager has appointed Matt Carter as director of UK intermediary distribution.

He joins Impax from Sarasin & Partners, where he was responsible for the distribution of thematic funds and outsourced investment solutions to financial intermediaries.

Calton Wealth Management

The wealth manager has named Laura Bruce as a non-executive director and Trevor Mitchell as an IFA.

Bruce brings a wealth of experience in financial services, including with the wealth management and private client teams at Barclays and Bank of Scotland.

Mitchell joins CWM from GRC Financial.

Dimensional Fund Advisors

The global investment firm has strengthened its team in northern Europe.

Kevin Hudson-Phillips, a 12-year veteran of Dimensional’s London-based global client group, has transferred to the firm’s Amsterdam office to work with investors in the Nordic and Benelux regions.

He is a regional director and vice president.

Atomos

The wealth manager has appointed Jon Taylor as chair, taking over from Alison Endemano.

Taylor previously sat on the wealth manager’s board as a non-executive director. Endemano had been chair since Oaktree Capital Management invested in Atomos in May 2022.

He has held several senior management roles within financial services including being chief executive of both Ascentric and Co-operative Insurance.

Guinness Global Investors

Tom Pearson has joined the investment firm as sales director for the southwest of England.

Before joining Guinness, Pearson was regional sales director at Crux Asset Management for five years.

STM Group

The cross-border financial services provider has announced Graham Kettleborough has tendered his resignation as a non-executive director of the company and as chair of the group’s UK subsidiary companies.

The resignation will take effect from 28 April 2023.