Enthusiasm on wane for Aberdeen Asset Management and Standard Life deal

Aberdeen Asset Management and Standard Life today erased most of yesterday’s share gains after investors turned bearish on the £11 billion tie-up.

Aberdeen shares fell to the same level as before the mega-merger — 286p — before recovering to 290p as investors faced up to a big cut to their dividend as a result of the deal.

Analysts have forecast a 23% reduction in Aberdeen shareholder payouts this year.

RBC Capital said Aberdeen investors will also have to stomach a 17% drop next year as the group comes into line with Standard Life’s dividend policy. “We believe the dividend cut may cause some of the positivity regarding merger accretion to be overshadowed,” RBC’s Peter Lenardos said.

Standard Life shares fell 11.4p, or almost 3%, to 388.6p.

The merger has faced a growing backlash over concerns about jobs and fears of outflows. Sir George Mathewson, former RBS chief executive and an influential Scottish businessman, said he regretted the tie-up because it would reduce “diversity” in the sector.

“It hastens the move towards [an attitude] of ‘why bother, we will just invest in an index fund’,” he told The Scotsman.