One of the City’s best-known fund managers, F&C Asset Management, looks set to fall into Canadian hands after entering into £700m takeover talks with BMO Financial, it emerged yesterday.
F&C, which can trace its roots back to 1868, said that it is holding “advanced discussions” with the North American lender and is likely to recommend a 120p-a-share offer from its suitor once a formal bid is made.
If completed, the deal would round off an eventful few years for F&C, which was overhauled in 2011 by corporate raider Ed Bramson.
Mr Bramson, who stood down as chairman in August, oversaw a 20 per cent rise in the group’s share price by stripping out costs, replacing its management team and altering strategy. His Sherborne Investors handed its near-20 per cent stake in F&C to its backers – including Aviva Investors and Standard Life – last year, meaning that they stand to pocket a good return on their investment.
Since shaking up F&C, Mr Bramson has also invested in Britain’s oldest private-equity group, 3i, although he sold down his 5 per cent holding in the company November and simply banked a profit.
BMO has until 24 February to make a firm offer for F&C, and it is not yet known whether the company would remain listed in the UK or not.
Talks between the two parties are the latest example of a Canadian institution investing in the UK, following previous deals by the Ontario Teachers’ Pension Plan and Canaccord.
Shares in F&C soared almost 25 per cent after the announcement, eventually closing up 22.9p at 116.4p.
BMO began life as Bank of Montreal back in 1817 and now controls total assets of C$537bn (£292bn) and employs 45,500 people in its retail-banking, wealth-management and investment-banking arms in Canada and the US. The company hopes to increase its presence across the globe in areas like Asia as well as London.
In contrast, F&C had assets under management of £90.1bn at the end of September down from £92.3bn at the end of June.