By James Langton
(October 19 – 11:50 ET) – Amvescap plc, parent of Trimark Financial Corp., says it will buy Perpetual, a U.K.-based fund manager, for £1.05 billion in cash and shares in a deal that mirrors its previous transaction to acquire Trimark.
Earlier in the year Amvescap was in simultaneous discussions with Perpetual and Trimark, however only the Trimark deal went ahead at that time. Perpetual is reported to have since had discussions with both Citicorp and J.P. Morgan.
The situation at Perpetual mirrors Trimark’s, a venerable fund firm’s founder looking to sell the business he has run for much of his life. In Trimark’s case it was Arthur Labatt. In the Perpetual deal, Martyn Arbib, the founder and principal shareholder, has accepted Amvescap’s offer of two shares and £10 for every Perpetual share. The deal values the firm at about 8.8% of assets under management.
Charles Brady, Amvescap executive chairman said, “With this transaction, we have achieved our strategic objective of gaining a leading position in the U.K. retail market place.” Amvescap has stated its intention to be in the top five of each major world market. With the acquisition of Trimark it vaulted to second overall in Canada behind Investors Group and the number one independent.
The fallout for Perpetual is expected to play out much as it has in Canada, with the Perpetual brand surviving but coming under the Amvescap umbrella, with Amvescap’s man in the U.K. taking over leadership of the combined firms.