By James Langton

(December 20 – 09:30 ET) – C.I. Fund Management Inc. is essentially giving up its bid to acquire Mackenzie Financial Corp. in the wake of the revelation of friendly talks between AIC and Mackenzie.

C.I.’s chief executive Bill Holland says that C.I. will not go ahead with a hearing today to cease trade Mackenzie’s poison pill. “I’m not going to say definitively that we won’t extend our bid, ” says Holland, but it is dropping its request to cease trade the pill which for all intents and purposes will see the C.I. bid die on the table.

Some of the details of AIC’s attempt to merge with Mackenzie were released by the OSC last night, including that it has been seeking permission to bid for Mackenzie since before C.I. did. After mulling over those details last night, C.I. has decided not to fight.

“AIC and Mackenzie and the caisse looks like a nice combo,” says Holland, “and if they get together I wish them all the best.” Holland says that if Mackenzie shareholders think it is the better offer they should tender to it, “That’s the litmus test.”

C.I. walks away from the deal with no regrets, and Holland says it will keep its powder dry for now, re-evaluating its position in a couple of months.