Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

F&C deal could spark Aviva/Standard Life clash

F&C deal could spark Aviva/Standard Life clash

Aviva Investors and Standard Life Investments (SLI), the two biggest shareholders in F&C, have clashed on Bank of Montreal's (BOM) proposed £708 million takeover of the firm.

In the wake of the deal, analysts at Canaccord Genuity have also suggested the length of the time needed for regulatory approval could open F&C up to rival bids.

Earlier in the day Bank of Montreal and F&C agreed terms on an all-cash £708 million takeover. The deal, which offers shareholders 120p per share alongside a 2p dividend, provides a hefty 30% premium to the 93.5p share price at close on 24 January.

However Standard Life Investments, which owns a 10.2% stake in F&C, believes the asset manager can be sold for a better price.

'We note that F&C have recommended a cash offer from the Bank of Montreal. 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,' SLI global head of equities David Cumming said in a statement.

This contrasts with F&C's largest investor Aviva, which owns 12.1% of the firm and has already pledged to vote in favour of the deal.

'Given board and management backing for the BOM offer and a valuation that is within our range of possibilities (albeit at the bottom end), we are comfortable providing our support to the transaction,' Aviva Investors head of UK equities David Lis told Wealth Manager.  

Analysts believe the delay in the deal getting the green light could set up a bid battle for F&C.

'Regulatory approval will lengthen the time of the acquisition with approvals needed from regulatory bodies in Portugal, Luxembourg, Netherlands, Canada, UK and Hong Kong,' Canaccord Genuity analyst Arun Melmane said.

'The all cash share offer remains in the ball park of intrinsic value of F&C, in our view the length of the time needed for regulatory approval could bring other potential bidders into the arena.'

According to Reuters, three retail funds accounted for part of the SLI stake towards the end of last year. Karen's Robertson's UK Equity Income and UK Equity Growth funds held 0.68% and 0.23% at 31 October and 30 September respectively, while the firm's Ethical fund owned a 0.13% interest in September.

Meanwhile Chris Murphy was among the significant investors at Aviva, holding a 1.63% stake at through his Aviva Investors UK Equity Income fund at the end of 2013.

Other top investors in F&C included Sanjeev Shah, who owned 4.48% via his Fidelity Special Situations fund at the end of December before he handed the fund to Alex Wright.  Meanwhile the team of Leigh Harrison and Richard Colwell controlled 1.46% through their Threadneedle UK Equity Alpha Income fund on 31 October.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.

Related Fund Managers

Alex Wright
Alex Wright
65/191 in Equity - UK (All Companies) (Performance over 3 months) Average Total Return: -0.18%
Christopher Murphy
Christopher Murphy
47/76 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 53.79%
Karen Robertson
Karen Robertson
40/76 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 55.40%
Leigh Harrison
Leigh Harrison
17/76 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 68.21%
Richard Colwell
Richard Colwell
16/76 in Equity - UK Equity Income (Performance over 3 years) Average Total Return: 68.21%
Sanjeev Shah
Sanjeev Shah
Citywire TV
Citywire TV
Play WMR: Why Russia will lose this war

WMR: Why Russia will lose this war

Author and journalist Adam Lebor believes a perfect storm is brewing when it comes to the Russian economy. .

Play WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

WMR: Gerard Lyons warns Asia is the real risk, not Russia & Ukraine

Chief economic adviser to London mayor Boris Johnson outlines the geo-political risks in Asia and explains why the risk of another eurozone crisis must not be underestimated.

Play Japan's slump, the umbrella revolution and the battle for Brazil

Japan's slump, the umbrella revolution and the battle for Brazil

With the arrows of Abenomics appearing to be missing their targets and political uncertainty rife in Hong Kong and Brazil we take a look at investor sentiment in this week's Investment Pulse

Your Business: Cover Star Club

Profile: The adviser that tempted Robin Minter-Kemp on board

Profile: The adviser that tempted Robin Minter-Kemp on board

It is rare to meet an impassioned individual who is willing to bang the drum for investment advisory right now

Wealth Manager on Twitter