Gartmore and Henderson have several similar funds and the only reason for a merger between the groups would be for Gartmore staff to crystallise profits from its stockmarket listing, advisers suggest.
This morning, the Daily Mail reported that Henderson may be considering an approach for Gartmore just 18 months after it completed its acquisition of New Star.
Meera Patel, a senior analyst at Hargreaves Lansdown, says: “There would be a big overlap in the funds, so what is going to happen with some of the big fund managers involved?”
Senior Gartmore staff received shares worth millions when the group launched a partial initial public offering at £2.20 per share in December 2009.
But since then a crisis involving the suspension and departure of senior fund manager Guillaume Rambourg has seen the price plunge to as low as 97p—56% lower than the opening price.
The shares rebounded to £1.21 as at 11.52am—a 3.4% gain today—on the takeover rumours.
Patel says the only reason Gartmore staff—including the biggest shareholder and senior fund manager Roger Guy—might accept a buyout by Henderson would be to crystallise the share price to prevent further losses.
She says: “If they did go ahead with the merger, if Gartmore agreed it, it would only be for personal financial reasons.”
The senior analyst adds there might also be a benefit for Henderson in boosting its levels of assets under management but she “can’t see where the synergies are going to come from”. (article continues below)
Darius McDermott, the managing director of Chelsea Financial Services, agrees that Guy’s opinion will be key in any merger talks.
McDermott says Gartmore has been establishing itself well as an independent fund manager.
He says: “Gartmore are building a reputation in the absolute return space. They have a strong European team and have been working recently to strengthen their UK team.
“Henderson are still tidying up the fund range that they acquired from New Star and there is likely to be more consolidation.”
Patrick Connolly, the head of communications at AWD Chase de Vere, says Gartmore represents an attractive buyout prospect.
He says: “Gartmore is a well run investment house and would be an asset to an acquiring firm. This is not the first time it has been suggested that Gartmore may be taken over, and until we have something more concrete we can only treat it as speculation.”