Gartmore in speculation on Henderson bid
UK - The share price of investment manager Gartmore this morning slumped 9.3% from its Friday close following speculation that Henderson Global Investors would bid 95p per share to acquire the beleaguered manager before the end of the year.
The Financial Times today reported that Henderson was ready to bid £344m (€407m), representing a price of around 95p per share, a slight discount on Garmore's share price on 16 December of 98.75p and less than half its 220p share price at flotation in December 2009.
Gartmore's share price initially jumped 6.1% on Friday to end the week at 104.8p on bid speculation, but fell back to 95p by Monday morning. This morning shares reached a low of 92p before jumping again to a day high of 96.25p by 15.25.
Henderson said its bid was conditional and that there was no certainty that it would proceed on the basis of Gartmore's announcement.
Gartmore put itself up for sale following a string of high profile departures this year, including that of star European fund manager Guillaume Rambourg.
Rambourg left the company to defend himself after an investigation into his conduct was launched by Britain's Financial Services Authority.
Fellow star fund manager and long time business associate, Roger Guy, announced his retirement last month.
Strathclyde Pension Fund was recently revealed to be concerned about Gartmore's performance in the wake of Rambourg's departure and the company's potential sale, leading it to draw up a list of potential replacements.
Gartmore reported European institutional AUM of €4.9bn as of 31.12.09 in the IPE Top 400 Asset Managers 2010 Guide. In 2002 the figure was €34.7bn.
If Henderson is successful in acquiring Gartmore, it will be its second acquisition of a fund management business which has fallen on hard times. The acquisition of New Star Asset Management took place in April 2009.
Industry figures had expressed concern about how much of Gartmore's managed assets might leave due to Guy's departure, the cultural issues surrounding the integration of another fund management group and the large equity holdings held by senior staff.
Industry analysts also expressed surprise that Henderson would choose to bid for Gartmore, as it is currently embroiled in a legal dispute with 30 pension funds over management of an underperforming PFI fund.