Bid target Evolution seals buy of BNP Paribas arm

LONDON (Reuters) - British investment bank Evolution EVG.L, which is the subject of a bid approach from South African financial group Investec (INLJ.J), said it had sealed the takeover of BNP Paribas Private Investment Management Ltd (PIM) (BNPP.PA).

Evolution had already said last month that it was in talks over buying the unit, as part of its plans to grow its wealth management arm.

Evolution said on Monday that the acquisition would bring some 1.8 billion pounds ($2.95 billion) in assets under management to its Williams de Broe wealth management arm. It will pay an initial 5 million pounds for the takeover.

"The acquisition furthers our aim to grow assets under management to 10 billion pounds in the medium term and we welcome the clients of PIM to Williams de Broe and its growing franchise," said Evolution Chief Executive Alex Snow.

Analysts have said Evolution's wealth management business itself may be one of the reasons why it has attracted the attentions of Investec.

Snow declined to comment on Investec's bid approach, but said he would continue to focus on growing the Williams de Broe division and the rest of the Evolution business.

"We will continue to work hard in these very difficult markets to grow the business," Snow told Reuters.

SECTOR CONSOLIDATION

Evolution shares were up 0.31 percent at 80.75 pence in early morning trade, giving the company a market capitalization of around 190 million pounds. Investec's shares edged lower by 0.56 percent in South Africa.

An acquisition of Evolution would be relatively easy for Investec to digest, given the South African's company far larger size. Investec had some 9.4 billion pounds of cash available as of March 31, 2011.

Investec, which has been boosting its asset management business to diversify beyond lending, said this month that its preliminary approach to Evolution was made "subject to obtaining a unanimous recommendation from the Evolution board and the satisfactory completion of due diligence." [ID:nL3E7J41UF]

Investec's approach for Evolution has come amid a backdrop of ongoing consolidation among Britain's smaller investment banks, who have been hit by the financial market downturn.

American investment bank Evercore Partners (EVR.N) bought UK advisory firm Lexicon Partners in June, while in February 2010 Portugal's Banco Espirito Santo (BES.LS) bought a majority stake in British stockbroker Execution Noble.

($1 = 0.610 British Pounds)

(Editing by Myles Neligan and Hans-Juergen Peters)