ISIS marks expansion with F&C acquisition.

Investors Chronicle, July, 2004

Isis Asset Management has fulfiled its promise to become one of the top five UK fund managers by buying larger rival Foreign & Colonial (F&C). The deal involves a 221 per cent increase in the number of Isis shares in issue, and also involves a share issue by Friends Provident, Isis' parent company. Friends Provident will own 51 per cent of the enlarged company, while Eureko - F&C's parent - will own 23 per cent.

Isis says that the deal will add scale and geographic diversity, and will be earnings-enhancing from 2005. But Teather & Greenwood estimates that the deal will dilute Isis' earnings per share by 15 per cent in 2005, and 4 per cent in 2006.

Strategically, this deal looks good for Isis, but the glut of new shares coming to the market is likely...

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