By James Langton

(November 6 – 12:10 ET) – In light of the proposed acquistion of Mackenzie Financial Corp., by C.I. Fund Management Inc., it is worth revisiting a front page story by Catherine Harris from the November issue of Investment Executive.

Harris, in her story on the likelihood of takeovers in the Canadian mutual fund industry, identified Mackenzie as the most likely target. With about $39 billion in assets under management, a $3.9 billion takeover by CI establishes Mackenzie’s price for $1 of assets at 10¢.

That’s slightly lower than the price Amvescap plc paid for Trimark Financial earlier this year, but above the 7.5¢ for $1 of assets that AGF paid for Global Strategy. CI’s stock is rather richly valued trading at about 12¢ per $1 of assets prior to this morning’s announcement.

There may well be some room for competing bids for Mackenzie. One analyst suggested to Investment Executive that a foreign buyer, such as Franklin Resources, could be in the running, as could a domestic bank. Potential domestic independent buyers are few and far between. Any bid will have to please Mackenzie’s major shareholders, Fidelity Management & Research Co. and AIC, which own 10.1% and 24.4%, respectively.

At March 31, Mackenzie also had 10.5 million share options outstanding, of which 4 million were exercisable. The total value of these options is about another $200 million.

Based on its most recent results, Mackenzie also carries the highest book value among the major public firms at $5.65 per share, followed by Investors Group with $4.94, AGF at $4.31 and CI at $2.93.