NationsBank to increase stake in London-based Gartmore Purchase exercises option with joint-venture partner

October 05, 1995|By BLOOMBERG BUSINESS NEWS

CHARLOTTE, N.C. -- NationsBank Corp. said yesterday it will probably buy at least 25 percent of Gartmore PLC, taking advantage of Banque Indosuez's decision to sell its 75 percent stake in the London-based investment management firm.

NationsBank is a 50-50 joint-venture partner of Gartmore in the ownership of Nations Gartmore, which combines Gartmore's international asset management capabilities with NationsBank's ability to target U.S. customers.

When it formed the joint venture earlier this year, NationsBank took an option to buy up to 25 percent of Gartmore if Banque Indosuez sold its controlling stake.

Last week, the Paris-based bank said it planned to sell. Banque Indosuez is a subsidiary of Compagnie de Suez SA, a Paris-based financial-services company.

"We would pursue the options" if Indosuez sells, said James Sommers, president of NationsBank Trust and Investment Management. "That would certainly appear to be where we would be headed."

NationsBank's option agreement allows it to purchase the stake from Indosuez for 200 pence per Gartmore share. Gartmore shares finished trading yesterday at 265.5 pence. The shares have gained 68 percent in the past 12 months.

"We have embedded profit in those options," Mr. Sommers said. "That would obviously be attractive."

With about 202 million shares outstanding, buying a 25 percent stake for 200 pence a share would mean an investment of 101 million pounds, or $160 million.

In addition to exercising its option, "We would consider bidding for 100 percent of the company," Mr. Sommers said, adding a decision will likely take "two or three weeks."

He said NationsBank received the information on Indosuez's sale plans early yesterday.

NationsBank is the third-largest U.S. bank, with $184.2 billion in assets.

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