F&C takeover thwarted by Standard Life

THE £700m takeover of F&C Asset Management by Canada’s Bank of Montreal has run into opposition from its second largest investor, Standard Life.

The Scottish insurance company, which holds more than 10pc of F& C, indicated yesterday it thought the 120p a share in cash offer was too low and said it is keeping its options open in case another suitor emerges.

There has been speculation that other bids could be launched, possibly by Aberdeen Asset Management and Ameriprise Financial, which holds a 7.3pc stake in F&C.

The offer price is at around a 30pc premium to before the announcement, but shares in F&C rose 7.1p to 123.5p taking it above this, suggesting the Canadians may need to hike their bid.

Aviva, the largest shareholder in F&C with a 12pc stake, is backing Bank of Montreal, as are the management team, who own just over a million shares between them.

But the takeover – which if successful will result in one of the City’s most historic firms falling into overseas hands – needs to win 75pc of the votes to go through.

F&C manages Britain’s oldest investment fund, the Foreign & Colonial Investment Trust, which was launched in 1868 to raise £1m to invest in foreign government bonds, and to bring the ‘investor of moderate means the same advantages as large Capitalists.’

In recent years it has had a turbulent time. Edward Bramson, an American shareholder activist, mounted a boardroom coup in 2011 and installed himself as chairman before exiting last year.

The F&C management team, led by chief executive Richard Wilson, is being offered the chance to move their long-term incentives into a Bank of Montreal scheme, or to take a cash payment.

The Canadians are also offering ‘retention payments’ to a number of key F&C staff, up to £3.4m.