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Amvescap grabs Trimark
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May 9, 2000: 5:26 p.m. ET
Asset manager to acquire Canadian rival for $1.8 billion; more deals to follow
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LONDON (CNNfn) - Anglo-U.S. asset manager Amvescap snapped up Canada's Trimark Financial Corp. Tuesday in a deal that valued the Canadian asset management firm at C$2.7 billion (US$1.8 billion). Analysts termed the offer "generous."
The deal would make the enlarged Amvescap Canada's second-largest mutual fund manager, and the new firm would have assets under management of US$410 billion. Analysts said more deals in the sector would surely follow.
"This is a generous offer... at a nice premium to where Trimark was trading before the deal rumors emerged," according to analyst Maitland Lammert, at Edward Jones. Prior to talk of a bid Trimark stock had been trading around the C$15 level. 
Lammert added that "a whole host" of candidates had been interested in Trimark, and said the industry would continue to consolidate in North America.
Amvescap is offering cash stock and debentures to Trimark investors, valuing the stock at C$27. "They (Amvescap) had to pay a high price to seal the deal," said one Toronto-based analyst who spoke on condition of anonymity. Trimark stock closed at C$24.60, up C$0.60 Tuesday after being suspended earlier in Toronto, while Amvescap (AVZ: Research, Estimates) shares closed down 1-13/16 at 66-3/16. Trimark will be added to Amvescap's Aim and Invesco brands.
Amvescap is already reported to be considering its next deal, involving the capture of leading British independent fund manager, Perpetual (PER). Perpetual confirmed Monday it is in talks that could lead to an offer, but was tightlipped on the identity of the possible bidder. Amvescap refused to comment.
"There'll definitely be more industry consolidation in Canada and the United States," commented Lammert, who pointed out that European firms have been active acquirers in the North American asset management industry in recent years, as the industry globalizes.
The trend is for players to seek a worldwide presence, along the lines of Boston-based firm Fidelity Investments, or to capitalize on particular sectors to develop niche expertise.
In North America the mutual fund industry grew very strongly throughout the 1990s - by an annual average of 30 percent in Canada by some estimates - but analysts said overseas markets now offer the greatest potential, since the North American market has matured and competition increased.
The concept of private sector retirement planning has spread across the globe - legislation is on the books in countries such as Japan, Hong Kong and Germany - as governments battle to defy the demographics of an ageing population by liberalizing investment regimes.
Previous deals in the sector include: Germany's Allianz (FALV) bought U.S. investor Pimco last year, while French insurer AXA (PCS) controls Alliance Capital through its ownership of The Equitable.
Lammert of Edward Jones pinpointed Barclays (BARC) of Britain and ING of the Netherlands as large European players seeking to establish a wider geographic franchise for themselves. Among U.S. companies she picked out Citigroup (C: Research, Estimates) and Bank of America (BAC: Research, Estimates) as ambitious players in the field. 
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Amvescap
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