Millfield hits the takeover trail

FINANCIAL adviser Millfield is stepping up its acquisition plans with a £16m fund-raising backed by five life assurers. Chief executive Paul Tebbutt said Millfield aimed to buy small independent financial advisers (IFAs) with turnover of up to £5m a year.

Millfield aims to take advantage of the Financial Services Authority's consultation paper Reforming Polarisation, which suggests a new tier of authorised financial advisers who will earn fees from commissions paid by a number of insurance and pension providers to whom they are tied.

Aegon, Friends Provident, Norwich Union, Scottish Widows and Skandia are each stumping up £2.4m to buy Millfield shares at 136p. A further £4.8m placing and open offer will be made to existing shareholders at the same price, which was also last night's closing price.

Millfield's pre-tax losses soared from £360,000 to £8.1m in the year ended March. Administrative expenses spiralled from £3.4m to £13.8m as it transformed its infrastructure to cope with the growth in IFAs from 100 to 362. Turnover rose 86% to £20.5m.