Henderson clinches £355m Gartmore deal

FUND manager Henderson is buying rival Gartmore in a £335 million deal to create one of Britain's largest fund managers, closing the book on Gartmore's troubled year as a public company.

Henderson said many of Gartmore's most-prized fund managers, controlling 84 per cent of its assets, will stay on with the enlarged group, which will have some 78 billion under management.

Cannaccord Genuity analyst Catherine Heath said: "The transaction comfortably offers at least 10 per cent earnings enhancement in (2011].

"We expect the announcement to be taken well by the market."

Henderson is paying 0.6667 new share for every Gartmore share, putting a 92.1p price on each for a 1.7 per cent premium to Tuesday's closing price.

The deal cystallises a 58 per cent loss for investors who bought shares when Gartmore floated in December 2009 at 220p.

The company suffered a litany of woes, including the departure of star managers Guillaume Rambourg amid a regulatory probe and, later in the year, Roger Guy. Both exits spooked clients and sparked heavy outflows of assets. Guy still holds a 4.6 per cent stake in Gartmore which will translate into a holding worth at least 15.5m in the enlarged Henderson, based on Tuesday's closing prices.

The acquisition price could prompt discontent among Henderson clients after some funds increased their overall holding in Gartmore to 14 per cent in November, buying more than five million shares at 101p.