David Ferguson, CEO of Nucleus

In the Scheme Document published by Nucleus, the firm’s staff have highlighted a ‘significant anxiety’ about the impact of the takeover on jobs.

Last month, Scottish Financial News reported that the firm’s board had reached an agreement on the terms of an offer by James Hay Holdings Limited for Nucleus for a total consideration valuing Nucleus at c. £144.6m.

Nucleus directors recommended shareholders accept the 188p per share cash offer for the business.

However, the document detailing the terms of the proposed takeover shows employees at Nucleus have substantial concerns about what it will mean for staff.

The document notes that a Peoples Representative Group (PRG) convened by Nucleus in accordance with regulations had initially been supportive of the idea of combining the two businesses.

However, the employee group rallied against the deal after considering changes planned by James Hay. James Hay is backed by the London-based Epiris private equity business.

The move by the PRG reflects concern that James Hay has said an unspecified number of jobs may be cut in the enlarged business following the takeover.

The employee group is also unhappy about the proposal to require around 230 of the 400 staff at Nucleus to transfer to FNZ, which will provide platform technology for the enlarged group.

The document states the PRG is opposed to the acquisition “on the basis of its concerns regarding the impact the proposed strategy of moving the underlying technology and operations of Nucleus”. It says the PRG is also concerned that James Hay has said the deal may be followed by “a moderate reduction in headcount where there is duplication or where operational efficiencies might be achieved”.

Feedback obtained by the PRG suggests “there is significant anxiety within the staff body regarding both the move to FNZ and the review of the central and HQ functions”.

The document notes the importance James Hay places on the skills and experience of Nucleus employees and that the review that could result in redundancies will cover the combined group.

It also notes that James Hay has said it will work with Nucleus’ management team to evaluate the existing platform arrangements and “intends no change to existing locations or place of work for employees”. Nucleus recently moved into Glasgow after acquiring a business run from the city.

The takeover must be approved by shareholders who represent 75% of votes cast at meetings that will be held on March 30.