Henderson in takeover talks with Gartmore

Anglo-Australian fund management house Henderson Group confirmed takeover talks with ailing rival Gartmore, fuelling fears another UK buy may slow its US expansion plans and hitting shares.

Gartmore said late on Friday it had entered into talks with Henderson on the basis of a proposal priced at "a slight discount" to Gartmore's closing share price of 98.75p on December 16, valuing the company at 360m.

"Henderson's proposal is conditional. No terms have been agreed and there can be no certainty that a transaction would proceed on the basis set out in Gartmore's announcement," the fund manager said.

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Analysts at Numis Securities gave Henderson a 'hold' rating, saying the potential deal was "contradictory to (its) previous intentions of expanding in the United States and Asia and now may limit expansion plans there".

"Much of the potential benefit of the transaction would depend on whether the combined company can stabilise the Gartmore business after its problems of the past year," said JP Morgan Cazenove which kept a 'neutral' rating on Henderson's shares.

Numis also said market regulator FSA may investigate Henderson's holdings in Gartmore.

"We believe there is some risk of a regulatory investigation into the way in which certain Henderson funds (which hold about 12 per cent of Gartmore) have acted – in particular increasing the stake in Gartmore post the Guy retirement announcement – and how they conduct themselves during the offer period," Numis said in a note.

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