Henderson Global Investors is to buy rival fund manager Gartmore in a £335.3m deal.
The acquisition is subject to shareholder and regulatory approval, but both firms’ boards are recommending the offer of two shares in Henderson Group for every three shares in Gartmore.
In a statement to the stock exchange, Henderson said Gartmore shareholders would receive 0.6667 of a new Henderson share for every Gartmore share.
Chief executive of Henderson Group – parent company of Henderson Global Investors – Andrew Formica, said: “The acquisition of Gartmore is a great opportunity for Henderson.
“Gartmore has a highly complementary strategy and stable of products to that of Henderson. Its recent travails should not overshadow the fact that Gartmore is one of the best known managers in UK fund management and its assets are performing well.”
Formica said bringing across fund managers and integrating the business onto the same platform would enhance margins, while expanding the product range on offer.
Henderson said a large number of Gartmore fund managers had already agreed to join the company, covering 84 per cent of assets under management. Managers agreeing to move to Henderson include Chris Burvill, manager of the Gartmore Cautious Managed Fund and John Bennett, European equities manager.
The acquisition will mean the combined group has £78billion assets under management.
In a statement, Henderson Group said the proposal would allow investors and advisers to refocus on the quality of the investment teams at Gartmore, while the successful integration of New Star after it was taken over by Henderson should provide comfort to investors that Henderson was capable of this type of integration.
The proposal is to complete the deal within three months, subject to approvals and certain conditions. In the summer, client administration and brand integration will take place.
After listing on the London Stock Exchange at the beginning of 2010, shares in Gartmore fell significantly following the departure of leading fund managers. This included in March 2010 the suspension and later resignation of Guillame Rambourg, involved in managing Gartmore's hedge fund business. Rambourg resigned to focus on a Financial Services Authority (FSA) investigation into whether he breached trading rules.
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