Elliott Management has enhanced its stake in F&C Asset Management with an 11% derivatives stake, according to a report from Financial Times.
Elliott’s position worth about £80 million was acquired through a bulk trade on Tuesday night, the Financial Times report reveals.
F&C in several funds’ radars
Last month, Polygon Global Investors, LLC in its letter to investors revealed that it holds a significant stake in F&C Asset Management plc (LON:FCAM), which was up 35% in January due to an offer from Bank of Montreal (NYSE:BMO). The report makes a case for holding onto the shares of F&C as other suitors might step up to the plate to make a bid. Polygon highlighted how analysts and investors believe others might be interested in F&C Asset Management plc (LON:FCAM). Moreover, F&C will not solicit interest from other parties and has recommended the Bank of Montreal (NYSE:BMO) offer. However, given the discounted valuation, Polygon believes other players might be tempted to get involved.
Interestingly, Polygon pointed out that several newspaper articles have speculated that other North American financial firms might be interested.
As reported earlier, many observers felt Bank of Montreal (NYSE:BMO), Canada’s fourth-biggest bank by assets, could have a fight on its hands. F&C Asset Management plc (LON:FCAM)’s second-biggest equity holder, Standard Life Investments, with about 10% of the shares, indicated the firm would be ‘open’ to other offers. The Financial Times too reported that being a listed company, many people have examined F&C and there are likely to be many interested parties.
In January, Bank of Montreal (NYSE:BMO) announced that it will buy F&C Asset Management, one of London’s most historic firms, for about 120 pence a share, a roughly 27% premium over the then prevailing price. Investors will also collect a 2-pence dividend for 2013, meaning the shares should be worth around 122 pence.
Elliott – The latest to join the bandwagon
With its disclosure Wednesday, Elliott Management, the New York hedge fund, became the latest to join the field and some industry analysts believe the hedge fund might be using its stake in F&C to draw in new bidders and agitate for a higher sale price.
Arun Melmane, an analyst at Canaccord Genuity, notes further speculation about a possible counterbid for F&C Asset Management plc (LON:FCAM) was likely given the six to eight months it would take to gain regulatory approval for BMO’s offer. He believes Elliott might be hoping that it can shake BMO into making a higher offer.