NatWest joins the tussle to win Gartmore
Thursday 12 October 1995
NatWest group is vying with several Continental banks for the prize of Gartmore, the UK fund manager. Having failed to acquire first Baring Asset Management, and then Mercury Asset Management at the time of the sale of SG Warburg, the UK bank is anxious not to lose out a third time.
Germany's Dresdner Bank and the Dutch giant ABN-Amro are also believed to be among the front-runners.
This spring Dresdner bought the British merchant bank Kleinwort Benson, which has a relatively weak fund management business. ABN-Amro already owns the broker Hoare Govett, but has said repeatedly that it wants to expand its fund management activities as part of its global investment banking ambitions.
Late last month the troubled French Banque Indosuez said it was putting its 75 per cent stake in Gartmore up for sale. The market values the company at more than pounds 550m, and any bidder would be expected to pay a hefty premium for control of Gartmore.
NatWest is looking significantly to expand its fund management business, which it sees as a key to building its retail financial services business in general.
It sees a bigger asset management business as enhancing the scope of what it can offer its retail customers.
Gartmore has pounds 24bn in funds under management, with a strong showing in UK pension funds. It lacks much investment trust business, however.
The American group GE Capital and ING, owner of Barings, have also been mentioned in the City as leading bidders.
Nationsbank of the US has a joint venture with Gartmore and as such has first refusal over up to a quarter of the British fund manager's shares. Any deal will have to be agreeable to the American bank, and it may well be a bidder itself.
Paul Myners, executive chairman of Gartmore, yesterday said: "No comment."
Dresdner also yesterday declined to comment on a newspaper report that it was interested in buying the Indosuez stake. "A flat no comment," said the Dresdner spokesman, Thomas Holm.
Gartmore's shares rose 10p to 276p on the speculation.
The German newspaper Suddeutsche Zeitung said Banque Indosuez had started talks with the German bank, citing informed sources.
The paper said the top potential buyers were Dresdner Bank, West LB and BHF Bank.
Gartmore, which reported pre-tax profits of pounds 16.2m for the six months to 30 June 1995, has been in the bid frame ever since US and German banks started nibbling at the UK financial sector.
Any buyer will have to provide "golden handcuffs" to retain staff.
The announcement that Indosuez was selling reignited speculation about other UK fund managers such as Mercury Asset Management, Perpetual and the Anglo-American Invesco.
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