Henderson to take over Gartmore

12 January 2011

Fund management group Henderson has announced that it has reached an agreement for the acquisition of beleaguered asset management firm Gartmore, for an estimated £355 million.

Following the announcement, shares in the group were up more than 11% at 154p, as the company said the acquisition would lead to a "significant enhancement" of its presence, with combined assets under management of £78 billion. This will make Henderson the sixth largest fund management firm in the UK retail space.

The directors of Gartmore said they consider the terms of the acquisition to be fair and reasonable and would unanimously recommend that shareholders vote in favour of the acquisition.

So far 12 Gartmore fund managers have said they will remain with the combined group, including Charlie Awdry and Chris Palmer from the emerging markets team and John Bennett from the European equities team.

Henderson said it was still working to secure the support of further Gartmore fund managers and added that the 12 it had already secured represented 84% of Gartmore's assets under management.

Completion of the acquisition will take place within the next three months, subject to Henderson and Gartmore shareholder and regulatory approval.

Andrew Formica, chief executive of Henderson Group, said: "The acquisition of Gartmore is a great opportunity for Henderson. Gartmore has a highly complementary strategy and stable of products to that of Henderson. Its recent travails should not overshadow the fact that Gartmore is one of the best known managers in UK fund management and its assets are performing well."

At the tail end of last year Gartmore went through a tumultuous time when its star fund manager Roger Guy and its chief investment officer Dominic Rossi announced their departure. Since it floated in 2009 at 220p, shares in Gartmore have more than halved to 100p.

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