Gartmore prospectus set to be dispatched to bidders

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The Independent Online

Prospective buyers of the US-owned fund manager Gartmore will be poring over its books within days.

The investment bank Morgan Stanley, which is handling the sale on behalf of the American mutual insurer Nationwide, is expected to dispatch detailed financial information on Gartmore to a string of potential trade and private equity bidders before the end of this week. These are likely to include the asset management groups Aberdeen, Henderson Global Investors, New Star and Schroders, and the banks BNP Paribas and Lehman Bros.

Gartmore, which manages £24bn in pensions, unit trusts and hedge funds, is expected to fetch about £600m - some £400m less than Nationwide paid for the business in 2000. But currency fluctuations will roughly halve that loss.

First-round bids must be tabled in about a month. Should they fall too far shy of the amount Nationwide wants for the business, it may decide to keep it or spin it off and seek a stock-market listing.

Nationwide may also choose to break up Gartmore. John Duffield's New Star is thought to be interested in only Gartmore's £10bn of retail unit trusts and offshore funds. The American group is understood to prefer a sale of the entire business.

Gartmore was part of NatWest until 2000, when its was sold to Nationwide during the takeover battle that saw the high street bank fall to Royal Bank of Scotland. Since then, Nationwide has grown the Gartmore brand rapidly in the US, which accounts for about half of total assets under management.

It is believed that the £22bn of Gartmore's American assets will not be included in the sale because they are managed by the parent company.

Last summer one likely Gartmore bidder, Aberdeen, edged out another, France's BNP Paribas, in the £265m auction for Deutsche Asset Management. The transformational deal almost tripled Aberdeen's assets and allowed the fund manager to diversify away from Asian equity markets to greater exposure to bonds and US and European stock markets.

Henderson, also expected to bid, has been offloading peripheral parts of the business to concentrate on fund management. The firm has about £70bn under management and is keen to land its first major acquisition.

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