Bank of Montreal has made a tentative offer for F&C Asset Management that would value the British asset management firm at $1.3 billion Cdn.
F&C Asset Management revealed the all-cash deal Monday, as required by British regulatory requirements. BMO did not comment.
BMO has offered 120 pence per share, a 27 per cent premium on the Friday stock price for F&C of 94 pence a share. F&C stock prices shot up in London trading on the news and were trading at 116 pence at noon ET.
“F&C and BMO are in advanced discussions,” F&C said in its filing. “F&C has indicated to BMO that it is likely to recommend a firm offer at the offer price.”
BMO has until Feb. 24 to make a firm offer.
F&C’s traditional business is investment trusts and managing fixed-income assets for insurers. It had £1.14 billion ($2.1 billion) pounds of assets under management in December 2012.
BMO, Canada’s fourth-largest bank by assets, has bought wealth management businesses in the U.S. and Asia over the last three years. It also has bought regional banks in the U.S., including Milwaukee-based Marshall & Ilsley, In 2007, it acquired Pyrford International PLC, a London-based institutional asset manager.