Quilter shares surged to a two-month high following a report it was in the crosshairs of NatWest.
The stock jumped 14.6 per cent, or 15.3p, to 120.3p after the Mail on Sunday reported the banking giant was in the early stages of studying a bid for the FTSE250 wealth manager.
City sources said private equity firms including CVC, Bain Capital and BC Partners have also shown interest in recent weeks.
Quilter shares surged to a two-month high following a report it was in the crosshairs of NatWest
Quilter and NatWest declined to comment. If NatWest scooped up the business, however, it would be the biggest acquisition for the lender since it went into taxpayer ownership at the height of the financial crisis with a £46bn bailout.
Quilter, with a value of nearly £1.5bn, is thought to be one of many wealth management firms that lack the scale and investment to compete with larger players in the sector.
Its shares have fallen nearly 37 per cent over the last 12 months and are worth 17 per cent less than their offer price when it went public in 2018 following the break-up of its parent, financial services firm Old Mutual.
Quilter has moved up NatWest’s list of potential targets as the bank looks to grow its wealth management business. In June, NatWest chief executive Alison Rose said the bank had ‘significant excess capital’ and would consider an M&A deal that can drive ‘compelling shareholder value’.
The bank already owns Coutts whose clients include the Queen, members of the aristocracy and wealthy City professionals. But a deal to buy Quilter would extend these services to ‘mass affluent’ middle-class households with more than £100,000 of spare cash to invest.
NatWest is also thought to be sizing up other financial services businesses although plans for these are still in the early stages. Predictions of a swoop on Quilter came after NatWest last month forecast its operating profit would hit £1.5bn in the second quarter of this year, a 20 per cent increase on the same period a year ago.
A takeover would also be the latest in a series of deals in the asset management industry, with 230-year-old firm Charles Stanley snapped up by US rival Raymond James for £279m last year. In April, London-based Brewin Dolphin was bought by Royal Bank of Canada for £1.6bn while Aviva purchased Succession Wealth Management for £385m in March.