* CEO Donahue prefers deals over dividends
* Pittsburgh company a possible buyer for Dexia arm
June 6 (Reuters) - Federated Investors Inc is looking for acquisitions and would not rule out a larger deal, its chief executive said on Wednesday.
The Pittsburgh asset manager, which ran $363.6 billion at March 31, 2012, has been cited as a possible bidder for the asset management arm of Franco-Belgian bank Dexia.
Speaking at a Keefe, Bruyette & Woods investment conference on Wednesday, Federated CEO Christopher Donahue was not asked about Dexia specifically. But Donahue said the bank would not rule out a larger acquisition if it fit his goals.
“We wouldn’t pause, in terms of size, if it was the right deal,” Donahue said.
Donahue also said he would prefer to use resources for deals, not dividends. “In terms of ... priorities, we do like the dividend. We would prefer to use cash for acquisitions,” Donahue said.
The company has about $500 million at hand to spend, including over $300 million in cash and marketable securities and a $200 revolving line of credit, Donahue said.
In April, Federated acquired $5 billion in fund assets from Fifth Third Bancorp.. The same month it finished buying Prime Rate Capital Management, a British provider of liquidity and fixed-income products for institutions.