Arbib set to net £400m as Perpetual finally agrees to Amvescap takeover

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The Independent Online

Perpetual, the fund management group, is expected to announce today that it has agreed a £1bn takeover deal with Amvescap, the Anglo-American money manager.

Perpetual, the fund management group, is expected to announce today that it has agreed a £1bn takeover deal with Amvescap, the Anglo-American money manager.

Charles Brady, Amvescap's chairman and chief executive officer, was due to fly in last night from the group's Atlanta headquarters to sign off the deal in London this morning.

The London-listed group, whose brand stable includes Invesco in the UK, yesterday confirmed that it was in revived takeover discussions with Perpetual on the basis of an offer of two of its own shares and £10 in cash for the each Perpetual share. Based on last night's Amvescap closing price of £12.90, the offer is equivalent to £35.80 a share.

Perpetual shares fell 470p to 3,617.5p on the news. The price is substantially below the £50 a share that Martyn Arbib, Perpetual's founder and biggest shareholder, is believed to have asked for this summer when Amvescap held abortive discussions with Perpetual about a deal. At the time Mr Brady insistedthat he was not prepared to do a deal which was dilutive to Amvescap shareholders.

Since then, Merrill Lynch, Perpetual's advisers had approached a number of potential UK and foreign buyers including CGNU, Allianz and ABN Amro. They all balked at the price, particularly as Perpetual's investment performance had suffered over recent years from its reluctance to participate in the stampede for technology stocks.Mr Arbib, a keen racehorse owner, is 60 and had been informally looking for a buyer for at least two years. The offer values his 40 per cent holding at around £400m.

Analysts said that the deal would enable Amvescap to plug an important strategic gap for the business at a reasonable price. On current earnings estimates, the deal would be immediately earnings enhancing. Perpetual has £12bn of funds under management.

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