BMO bids $1.3B for U.K. asset management firm

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.

F&C Asset Management says Canadian bank bid 120 pence a share

Bank of Montreal chairman Robert Prichard addresses shareholders during the company's annual general meeting in Saskatoon on April 10, 2013. BMO is making a bid for U.K. asset management company F&C. (Liam Richards/ Canadian Press)

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.