(February 5 – 17:50 ET) – Merrill Lynch has resumed its coverage of U.K.-based money manager Amvescap plc with a medium-term accumulate, long-term buy rating.

Merrill is reinstating coverage of Amvescap with a target price of £16.50 on the stock, which currently trades at around £14.70. The firm trades as an exchangeable issue on the Toronto Stock Exchange thanks to last year’s acquisition of Trimark Financial Corp.

Merrill says that its current estimates for Amvescap include the acquisition of U.K.-based money manager, Perpetual. Along with Trimark, this deal was Amvescap’s other big acquisition last year. Merrill expects the Perpetual acquisition to be accretive to Amvescap’s earnings this year, and it has forecast an EPS of 71.4p for the firm in 2002.

“The acquisition of Perpetual, announced towards the end of last year, should confirm INVESCO / Perpetual as one of the more powerful retail asset managers in the U.K.,” says Merrill. “We believe our new estimates are conservative. Amvescap has tended to trade at a premium to other U.K. listed asset managers, we believe reflecting its global position and the potential for it to expand in both Europe and Asia — regions expected to grow quicker than the U.S. marketplace.”

It notes, “We believe Amvescap deserves a premium rating based on its track record and scope for growth in the future.”
-IE Staff