Colonial expansion

2 July 2004 By Chris Hughes

FP gets a controlling stake, but it s paying a premium for the privilege. That was more attractive to F&C than taking an IPO discount. It is merging fund manager Foreign & Colonial into the asset management arm of Friends Provident.

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ISIS, the listed asset management arm of UK insurer Friends Provident, is merging with Foreign & Colonial, the fund management unit of financial services group Eureko.

Eureko will receive new shares in ISIS in exchange for its 100% interest in F&C. It will then sell a proportion of those shares to FP receiving a mixture of cash and FP shares and another tranche to institutional investors.

It will retain shares giving it a 23% stake in the business.

Following the various transactions, Friends Provident's stake in the enlarged company will be 51% against its present current 67%.

The new company will be called Foreign & Colonial and will drop the ISIS brand.

Howard Carter, chief executive of ISIS, will head the group, while Robert Jenkins, chief executive of F&C, will be nonexecutive chairman.

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