Gartmore may lose half of 350-strong workforce in takeover
More than half of Gartmore's 350 staff are set to lose their jobs if the cut-price takeover by Henderson Group goes ahead.
Investors will also be left out in the cold this Christmas - a 95p a share offer is likely to be the best they can get and even this price could be ratcheted downwards.
Gartmore, which floated in December 2009 for 220p a share, is desperately trying to sew up a deal with Henderson before the festive holiday.
Its shares fell 9 per cent yesterday in disappointment that a discounted price is the only offer on the cards.
Clients have withdrawn billions from Gartmore funds since it was put under the microscope by a regulatory investigation into former employee Guillaume Rambourg.
The recent departure of star fund manager Roger Guy has prompted a further exodus of funds.
Most of the £3.5bn managed by Guy is thought to have been withdrawn over the last month since his resignation was announced.
Executives fear a further delay over the fate of the firm could reduce its funds even more.
At the last update in early november, the group had £20.7bn under management, but the high-profile departure has shattered confidence in the firm.
Shares in Gartmore tumbled 9.05p to 95.75p. Henderson shares ticked up 0.1p to 130.6p.
It had planned to focus on expansion in the US and asia but couldn't resist an opportunistic tilt at Gartmore.
The duo are in discussions about Henderson paying 'a slight discount' to the 98.75p closing price of Gartmore on December 16, which valued the firm at £360m.
Interestingly, Henderson funds already own a 14 per cent stake in Gartmore, because one of their key fund managers believed the stock was undervalued.
Henderson would be likely to mirror the approach it took when it rescued rival fund manager new star.
It ended up keeping on just 90 out of the 250 new star employees, merged a large chunk of funds with its own and hived off those it wasn't too keen on.
It also negotiated a reduction in the eventual takeover price because new star had seen a further reduction in funds under management - a tactic that it may also try with Gartmore.
The disastrous float leaves a black mark against its former private equity owner Hellman & Friedman which still owns nearly 20 per cent of the stock.
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