UPDATE 2-Bank of Montreal agrees to buy UK's F&C for $1.2 bln

Tue Jan 28, 2014 8:28am EST
 
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* F&C shareholders to get 120p in cash plus 2p dividend

* 12.1 pct shareholder Aviva to vote in favour of deal

* 2nd biggest shareholder says keeps options open

* F&C shares move to slight premium to value of bid

* Shares up 5 percent, rise as high as 123p (Adds shareholder reaction, updates shares)

By Chris Vellacott

LONDON, Jan 28 (Reuters) - Bank of Montreal has reached a deal to buy UK-based F&C Asset Management Plc for 708 million pounds ($1.2 billion) just a day after first announcing an offer, saying the move would help expand its wealth management arm.

The agreement announced on Tuesday marks a major push by Canada's fourth-largest bank to expand its funds division and is in line with moves by some other banks to grow in the relatively less risky fund management sector.

The deal sent shares in F&C, operator of the world's oldest investment trust, up another 5 percent on top of double-digit gains the previous day after the bank first said it had made a preliminary bid.   Continued...