June 16, 2010 / 1:48 PM / in 7 years

UPDATE 3-Canada's Fiera Capital to buy Sceptre Investment

* Fiera Capital’s majority shareholder to head new firm

* Sceptre shareholders to get C$0.60/share on closing

* To see “significant” rev growth from cross selling

* Sceptre shares touch year-high (Adds details, background, comments from conference call)

TORONTO/BANGALORE, June 16 (Reuters) - Privately held investment manager Fiera Capital said it would buy Sceptre Investment Counsel Ltd SZ.TO, creating a new publicly traded company with C$30 billion ($29 billion) in assets under management.

News of the deal, which will see Fiera Capital stakeholders control about 60 percent of the new company Fiera Sceptre, saw stock in Sceptre soar as much as 34 percent to C$6.97, its highest this year.

Sceptre manages fund portfolios for pension and other savings plans, and has about C$7 billion in assets under management. Fiera Capital currently manages assets worth C$22.5 billion.

The two companies expect “significant” revenue growth from cross-selling in the new firm, as there is little overlap between Sceptre’s and Fiera Capital’s institutional clients.

Under the agreement, Sceptre shareholders will exchange 14 million common shares for 14 million new class A subordinate voting shares of Fiera Sceptre.

Fiera Capital will also transfer all its operating assets and related liabilities for 21.1 million class B common shares of Fiera Sceptre.

The new entity will have a total of 35.1 million class A subordinate voting shares and class B shares.

The companies said they would only list Class A shares of Fiera Sceptre once the deal closes, which is expected in late summer.

The value of the deal was not disclosed.

At the time of closing, a payment of C$8.4 million, or 60 Canadian cents a share, will be paid in the form of a capital distribution to Sceptre shareholders.

The companies said they expect to pay a quarterly dividend of 6 Canadian cents per share on completion of the deal.

Jean-Guy Desjardins, majority shareholder of Fiera Capital, will be chairman, chief executive and chief investment officer of Fiera Sceptre, and will have a controlling stake in the company.

High-profile businessman Jean Monty, a minority shareholder of Fiera Capital, will acquire 833,333 class A shares of Fiera Sceptre worth C$5 million, or C$6 each.

TD Securities Inc is acting as Sceptre’s financial adviser. GMP Securities LP is acting as financial adviser to Fiera.

Shares of Sceptre were trading up 28 percent or C$1.45 at C$6.65 Wednesday afternoon on the Toronto Stock Exchange. ($1=1.026 Canadian Dollar) (Reporting by Aftab Ahmed in Bangalore and Pav Jordan in Toronto; editing by Rob Wilson, Roshni Menon)

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