STANDARD Life last night revealed it was in “exclusive and advanced” talks to acquire fund management heavyweight Ignis Asset Management in a deal likely to be worth some £400 million.
The announcement followed a report that the life and pensions giant was one of a clutch of bidders said to be interested in Ignis, which controls the money of some six million British pension investors.
The deal comes amid a rush of activity in the fund management industry. Aberdeen Asset Management is close to completing its £660m takeover of Scottish Widows Investment Partnership, while F&C Asset Management is being sold to Bank of Montreal in a £700m deal.
Large fund managers owned byEuropean banks are also expected to be offered up for sale this year.
Ignis, which manages almost£70 billion of pension funds, is being sold by parent company Phoenix Group – a life assurance acquisition vehicle that is home to several brands,including Scottish Mutual Assurance.
Phoenix is said to be under pressure from investors to cut its £2bn debt pile and is expected to report further progress in reducing gearing in its results this week.
Last night, Standard Life said it “notes recent press speculation and confirms that it is in exclusive and advanced discussions with Phoenix regarding a potential acquisition of Ignis Asset Management.
“Discussions are ongoing and there can be no certainty that any transactionwill be agreed. Standard Life will make further announcements if and whenappropriate.”
Other names that were linked yesterday with a move on Ignis wereCanadian banking group RBC andMacquarie, the Australian investment house. Both firms were involved in the bidding for the Scottish Widows’ fundbusiness.
Advisers at Evercore, the boutique investment bank, are believed to have been appointed to handle the sale of Ignis, which has been linked to a potential sale several times before.
Yesterday’s Sunday newspaper report suggested that if Edinburgh-based Standard Life was successful in acquiring Ignis, it would be expected to fold the business into its fund management division and cut many of its staff.
Last month, Standard Life reported an operating profit of £751m for 2013 – down from £867m the previous year, but ahead of City forecasts of about £700m. The decline was blamed on lower one-off gains compared with 2012, when the bottom line was boosted by the sale of properties in Canada.
Funds under administration rose 12 per cent to £244.2bn, in line with analysts’ predictions, helped by strong inflows into corporate pensions.
Third-party assets under management at Standard Life Investments were 17 per cent higher at £97.4bn.
Last night, Phoenix also released a statement.
It said: “Following an approach from Standard Life, Phoenix confirms that it has entered into exclusive discussions with Standard Life regarding a potential bid for Ignis. Discussions are at an advanced stage but there is no certainty any transaction will be agreed. Phoenix will update the market at the time of itsannual results on Wednesday.”