UPDATE: Gartmore Confirms Acquisition Talks With Henderson

Gartmore Group Ltd. (GRT.LN) Friday confirmed that it is in talks with Henderson Group PLC (HGI.LN) that could lead to Henderson acquiring the struggling fund manager.

"These negotiations are on the basis of a proposal at a slight discount to the Gartmore share price at the close of trading on December 16, 2010," Gartmore said in response to earlier press reports.

Henderson has been tipped as a possible buyer for Gartmore since last month after the high-profile departure of two of Gartmore's star managers, most recently Roger Guy, the company's top fund manager. Gartmore's shares plummeted on the news and the simultaneous announcement that Gartmore had hired Goldman Sachs (GS) to find a buyer for the company.

Henderson has been on the look out for acquisitions to diversify and strengthen its product offerings over the past few years. Some 18 months ago, it bought New Star Asset Management, giving it a sizeable chunk of U.K. retail funds, while earlier this year it looked at U.S. fixed-income fund manager RidgeWorth Capital Management Inc., part of SunTrust Banks Inc. (STI).

Gartmore would be an "opportunistic" buy for Henderson, the person said, complementing existing businesses and boosting exposure in emerging markets.

Gartmore said that the negotiations are on the basis of a proposal at a slight discount to the Gartmore share price at the close of trading on Dec 16.

Friday Gartmore's shares went as high as 126 pence before closing at 105 pence, up 6%. Henderson closed unchanged at 131 pence.

-By Marietta Cauchi, Dow Jones Newswires; +44 207 842 9241; marietta.cauchi@dowjones.com

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