Executive Summary

On 14 April 2026, Merrill Lynch International filed a Form 8.5 (EPT/RI) dealing disclosure with the Regulatory News Service of the London Stock Exchange in respect of dealings on 13 April 2026 in the 20p ordinary shares of Schroders plc (LSE:SDR). Merrill Lynch International is the disclosing entity, acting in its capacity as an Exempt Principal Trader with Recognised Intermediary status. The form names Pantheon LLC as the offer party with which Merrill Lynch is connected, indicating that the firm is on the offeror side of the proposed transaction in respect of Schroders plc.

The dealing detail on the form records cash purchases of 22,012 Schroders ordinary shares at prices between 5.7825 GBP and 5.785116 GBP, and sales of 5,262 ordinary shares at prices between approximately 5.7825 GBP and 5.7850 GBP, alongside a series of equity swap transactions that variously reduced and increased a long position in the same security at prices clustered tightly around 5.78 to 5.79 GBP. The disclosure is consistent with normal client-serving market-making activity by an investment bank during an offer period and is filed in compliance with the dealing disclosure obligations imposed on connected exempt principal traders by Rule 8.5 of the Takeover Code.

The Schroders / Pantheon Context

Schroders plc is one of the United Kingdom's largest independent asset managers, with a long history of managing public equity, fixed income, multi-asset and private market strategies for institutional, wealth management and intermediary clients. Pantheon LLC is a global private markets firm. The naming of Pantheon as the connected offer party in this Form 8.5 indicates that an offer period exists in respect of Schroders plc, with Pantheon either positioned on the offeror side or otherwise treated under the Code as connected with the proposed transaction.

Merrill Lynch International, the dealing entity and a member of the Bank of America group, has been engaged on the Pantheon side. Its disclosure in the EPT/RI capacity confirms that the dealings reported are bona fide client-serving activity executed independently of any corporate finance involvement that the Bank of America group may have in the transaction, with effective information barriers in place between the Pantheon-related advisory work and the trading desks reporting on this form.

The Status of EPT/RI Disclosures under Rule 8.5

Rule 8.5 of the City Code on Takeovers and Mergers governs the disclosure of dealings by Exempt Principal Traders during offer periods. Where the EPT also has Recognised Intermediary status, dealings are reported using the Form 8.5 (EPT/RI) template. The form requires disclosure of cash purchases and sales, cash-settled derivative transactions, stock-settled derivatives and any other dealings in relevant securities. As an EPT/RI, the firm does not need to disclose its underlying positions because, as a recognised intermediary, those positions are deemed to be held in a market-making capacity for clients rather than on the firm's own account.

The EPT regime is one of the more important features of the Takeover Code's architecture. It allows large investment banks to continue providing liquidity to their clients in the relevant securities of an offeror or offeree during an offer period, without those activities being treated as disqualifying dealings or as contravening the various concert party and dealing prohibitions that the Code imposes on parties connected with a transaction. The price for that flexibility is granular daily disclosure: every dealing in a relevant security must be reported, with high and low prices for each class of dealing, by 3.30 p.m. on the next business day.

Detail of the Dealings Reported

The dealings table on the Merrill Lynch International filing breaks the day's activity into three blocks. The first block records cash purchases and sales of 20p ordinary shares: a purchase of 22,012 ordinary shares at a high of 5.785116 GBP and a low of 5.782500 GBP, and a sale of 5,262 ordinary shares at a high of 5.78500 GBP and a low of 5.782493 GBP. The narrow spread of prices on both sides of the book, less than half a penny across a full trading day, suggests that 13 April 2026 was a quiet session in the underlying stock, with little intraday volatility.

The second block records a long series of cash-settled equity swap transactions. The schedule of dealings shows the firm both reducing and increasing long positions across multiple individual lots, with prices clustered around 5.7848, 5.7849, 5.7850, 5.7851, 5.7853 and 5.7854 GBP. The fine granularity of the price points, calculated to four decimal places of GBP, reflects the standard practice for derivatives desks that quote against volume-weighted average prices or specific tranches of an underlying transaction. Several of the lots are very small, including individual swap lines for fewer than 100 reference securities, while others are in the high hundreds.

The combined activity on the day shows a modest net long extension by Merrill Lynch International, with cash purchases more than offsetting cash sales and the equity swap activity broadly balanced between increases and reductions. There is no sign of a directional one-way move that would suggest position-building by a single client, and the pattern is consistent with multi-client flow being managed actively across cash and synthetic legs.

Confirmations Concerning Indemnities, Concert Parties and Other Arrangements

As with all Form 8.5 disclosures, Merrill Lynch International's filing includes the standard confirmations required by Rule 8 in respect of any indemnity or option arrangement that may be an inducement to deal or refrain from dealing, and any agreement, arrangement or understanding between the EPT and any other person relating to relevant securities. In bona fide client-serving activity of the type recorded on this form, those sections are completed with statements that no such arrangements exist.

The disclosure also confirms the absence of any agreement, arrangement or understanding (formal or informal) between the EPT and any other person relating to the voting of relevant securities or the future acquisition or disposal of such securities. These confirmations are essential to the operation of the EPT regime, because they support the Panel's view that the dealings are independent of the connected corporate finance team and are not part of a coordinated effort to support, hinder or otherwise influence the proposed transaction.

What the Disclosure Tells the Market

From an investor's perspective, the Form 8.5 disclosure is most useful as a confirmation of orderly market behaviour. The narrow intraday range, balanced flow and absence of large concentrated trades together suggest that, on 13 April 2026, market participants were positioning around the offer at consensus prices rather than reacting to fresh news. For shareholders of Schroders plc, this is a useful confirmation that the offer remains within an established trading range and that institutional dealing is taking place in a measured way at price levels close to the prevailing offer terms.

For traders following the offer for arbitrage or relative-value purposes, the granular per-trade detail is more directly actionable. The exact timing and pricing of the swap activity may give clues about the size and direction of underlying client demand for synthetic exposure to Schroders, which is in turn an indicator of the broader market view on the probability and timing of the proposed transaction. Even the smallest swap lots, which might appear inconsequential individually, can collectively reveal the structure of bespoke client positions being put on or unwound around the deal.

The Wider Compliance Burden

Filing a Form 8.5 disclosure is not a trivial exercise. For a large investment bank with multiple connected mandates running simultaneously, the compliance team may need to file dozens of forms each business day across different offerees and offerors. Each form requires careful capture of every dealing in the relevant securities, accurate calculation of high and low prices for each class of dealing, completion of the standard confirmations regarding indemnities and concert party arrangements, and lodgement with the Panel in advance of the next-business-day deadline. Errors in disclosure are taken seriously by the Panel, which has the power to censure individuals and firms publicly for breaches of the dealing disclosure regime.

The level of diligence reflected in Merrill Lynch International's filing - the granular price points, the precise volumes, the explicit characterisation of each swap as either an increase or a reduction in a long position - is therefore not just a regulatory checkbox exercise. It reflects a substantial compliance and operational effort that is built into the daily routines of a connected exempt principal trader. The transparency this produces is one of the cornerstones of the UK takeover regime.

Conclusion

The Form 8.5 (EPT/RI) disclosure filed by Merrill Lynch International on 14 April 2026 in respect of Schroders plc is a model example of routine, granular dealing transparency in connection with an open offer period. The dealings reported are modest in size, balanced between cash and synthetic legs, and clustered within a narrow intraday price band. They contain no obvious indications of strategic positioning or material event flow, but they nonetheless form an important part of the daily mosaic of disclosure that allows the Takeover Panel, the parties to the offer and the wider market to monitor activity in the relevant securities of Schroders during the live offer period in which Pantheon LLC is named as the connected offer party.

Wider Considerations for the Schroders Situation

The Schroders / Pantheon transaction is one of several live UK asset management situations in early 2026, and the Form 8.5 disclosures filed by Merrill Lynch International, BofA Securities Europe SA and Barclays Capital Securities Ltd over the course of the offer period provide an unusually rich evidentiary record for observers seeking to understand the dynamics of the deal. The fact that two major investment banks are filing disclosures from both sides of the transaction (Bank of America on the offeror side, Barclays on the offeree side) underscores the multi-firm advisory architecture that typically supports a transaction of this scale.

From an arbitrage perspective, the narrow intraday price range visible in the Merrill Lynch International disclosure - less than half a penny across the trading session - is consistent with a market that has settled into a stable consensus view of the offer terms. Such stability is generally welcomed by the parties to the deal, because it implies that the market has digested the announced terms and is not anticipating either a competing bid or a withdrawal. Where intraday volatility increases sharply, by contrast, it can signal new information flow that may eventually lead to revised terms or an alternative outcome.

For Schroders shareholders, the cumulative pattern of dealing flow disclosed by the connected exempt principal traders is one of the most useful real-time inputs into their decision-making about how to respond to the offer. While individual disclosures are rarely material on their own, the consistency and direction of dealing flow over multiple days can give a useful indication of the depth and breadth of institutional interest in the deal. The disciplined cadence of Form 8.5 disclosures filed by major banks ensures that this information flows into the public domain on a near-real-time basis.