M&G squashes speculation about bid from Halifax

M&G, the leading fund manager and life office, yesterday moved to halt a wave of speculation that Halifax was about to launch a bid for the group, which manages pounds 18bn and sells one-sixth of all personal equity plans.

Michael McLintock, M&G's 36-year-old group chief executive, declined to comment on a rash of bid speculation which has dominated trading in its shares since Merrill Lynch announced a bid for Mercury Asset Management, a rival fund manager, nine days ago.

However, he squashed speculation that M&G was in talks with any company by pointing to the rules of the Takeover Panel. "The Takeover Panel requires you to make an announcement if there's an untoward movement in the share price. We haven't made an announcement. I leave you to draw your own conclusions," Mr McLintock said.

Shares in M&G have risen by more than 23 per cent since 19 November, when Merrill Lynch announced its friendly acquisition of MAM.

When the announcement was made, M&G's share price stood at pounds 11.80, valuing the group at pounds 883m. It is now valued at pounds 1.07bn.

City dealers yesterday appeared to cling to the belief that a bid is imminent, marking down the shares just 14p to pounds 14.32. M&G has been battered by a negative reaction to the investment performance of its funds, which have underperformed the FTSE 100 index, sometimes by substantial margins. This has led to a big outflow of funds owned by retail investors.

Sales were down by one-quarter to pounds 511m while the number of redeemed policies rose by one-third to pounds 693m - a reversal of the situation last year. However, Mr McLintock has brought in new management and revamped the group's funds.