Henderson Group Plc and Jupiter Fund Management Plc rallied in London trading after a report said Wells Fargo & Co., the largest U.S. bank by market value, is looking to buy a U.K. asset manager.
Wells Fargo is weighing several potential takeover targets including Henderson and Jupiter to help bolster its presence in London, the Sunday Times reported, without citing anyone. The fund managers’ shares closed up 2.1 percent to 290.3 pence and 2.5 percent to 462.7 pence respectively. A spokesman for Wells Fargo said it has “no immediate plans” to buy a U.K. investment firm.
“The article is believable, but nothing is imminent in our opinion,” said Peter Lenardos, an analyst at RBC Capital Europe Ltd. in London. “The asset management industry is ripe for consolidation, with a bank, insurance company and or a larger asset manager all possible acquirers. The weaker British pound against the U.S. dollar makes a takeover of a U.K.-listed asset manager particularly attractive.”
Wells Fargo Chief Executive Officer John Stumpf plans to double the size of its funds business in the next decade, the Sunday Times said.
Henderson and smaller competitor Jupiter both predominately invest in equities. The shares of both firms have surged more than 25 percent this year, boosting their market value to 3.3 billion pounds ($5 billion) and 2.1 billion pounds respectively.