F&C snapped up by Canadians in £700m deal

Michael Bow
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ONE of the City’s oldest fund managers was acquired by Canadian financial giant Bank of Montreal yesterday, despite a top F&C shareholder delaying its backing for the deal.

F&C Fund Management, which traces its roots back to 1868, said it had agreed to the 120p a share offer from Bank of Montreal’s Canadian backer BMO Financial.

F&C’s top shareholder Aviva has supported the deal but Standard Life Investments – which owns over 10 per cent of the company – said it wanted to keep the door open for rival offers to top BMO’s price before agreeing.

“The price agreed represents an attractive valuation from the standpoint of the Canadian Bank. Consequently we intend to keep our options open should another suitor for F&C emerge,” the firm’s global head of equities David Cumming said.

Despite the shareholder split, F&C and BMO remained firmly on track yesterday. The deal is thought to have been in the works since an approach was made by BMO in December.

“The acquisition demonstrates BMO’s deep commitment to the asset management business,” BMO boss Bill Downe said yesterday.

“Looking forward, BMO represents a unique opportunity to broaden and accelerate our ambitions,” F&C chief Richard Wilson added.

Barclays was yesterday named as the financial adviser to Bank of Montreal on the deal. The UK-based bank has worked with the Canadian group in the past. JP Morgan Cazenove is advising F&C.

Standard Life’s intervention has, however, prompted speculation that a rival may enter the fray and scupper the deal with a higher bid.

Names such as Ameriprise Financial – which owns 7.3 per cent of the company – and RBC, which bid for UK fund manager Scottish Widows Investment Partnership last year were touted as candidates.

The deal is not due to close until 1 May, giving rivals ample time to mount a counter-bid.

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