* Deal values F&C at $1.15 bln plus dividend payment
* F&C likely to recommend offer
* F&C shares surge 26 percent
LONDON, Jan 27 Canadian bank BMO Financial Group
has made a preliminary offer to buy British fund
manager F&C Asset Management for 697 million pounds
($1.2 billion) in cash.
F&C, which manages a little over $148 billion, said on
Monday that the bank had make an indicative offer of 120 pence
per share, a 28 percent premium its closing share price on
The fund manager, which can trace its roots back to the
launch of the Foreign & Colonial Investment Trust in 1868, said
it has indicated to BMO that it is likely to recommend a formal
offer at that price, and talks were at an advanced stage.
News of the approach sent shares in F&C soaring 27 percent
to 118.8 pence, just below BMO's offer.
F&C shareholders would also be entitled to receive a 2 pence
per share dividend for the 2013 financial year.
For BMO, formerly known as Bank of Montreal and one of
Canada's five largest banks, any deal would more than double the
size of its global asset management arm.
According to its website, BMO Global Asset Management runs
more than $132 billion in assets.
Analysts at Numis said the price did not look like a
"We would therefore see 122p as very much a floor value
(given the board's recommendation), with some upside potential
if other interested parties were to emerge, given the price,"
they said in a note to clients.
BMO has until Feb. 24 to announce whether or not it intends
to make a formal offer for F&C.