Invesco raises pounds 119m for AIM

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The Independent Online
Invesco yesterday raised pounds 119m via a rights issue to contribute towards the cost of the $1.6bn (pounds 1bn) merger with Texas-based AIM, a deal that will make it one of the world's largest fund management groups.

Most of the merger price will be satisified by the issue of 290 million Invesco shares to shareholders in AIM. The remaining $500m is being raised in cash from loans and yesterday's rights issue.

The rights issue will be made by Invesco Funding LLC, a wholly owned subsidiary of Invesco, on the basis of one unit of convertible unsecured loan stock in Invesco Funding for every five existing Invesco ordinary shares.

The units will be converted into new ordinary shares in Invesco provided that debt-financing commitments have not been terminated.

The merged group, which will be renamed Amvesco, will control $150bn of funds which values the 72 per cent of the mutual fund group held by AIM's founder directors and management at pounds 720m.

Four top executives of AIM, including Ted Bauer, the 77-year-old founder, are to be locked in with four-year fixed-term contracts which will then convert to one-year rolling contracts.

Mr Bauer's stake in AIM is worth about pounds 110m and he will end up with 5 per cent of the merged company.

AIM shareholders will own about 45 per cent of the enlarged group, and all of them - including TA Associates, a US venture capital firm which will hold 12 per cent of Amvesco - will be restricted for at least a year in selling their stakes.