Swoop for M&G might not meet a robust defence

OH, the irony. A matter of weeks after M&G fund managers forecast a wave of overseas bids for London-listed companies, it turns out that one of those targets is M&G itself.

The latest suitor, as I reported on Sky News last week, is Macquarie, the Australian financial behemoth. Acquiring M&G’s asset management business would fill a notable gap in Macquarie’s European fund management operations, even if a deal will be laden with complexity.

The Australian group is seeking a partner to take on M&G’s insurance operations, with one of the obvious players –Phoenix Group –already consumed with digesting earlier acquisitions. Executing a deal might also be more straightforward if a London-listed insurer provides the vehicle to acquire M&G and sells the fund management arm on to Macquarie, rather than vice versa.

M&G’s ability to forge a robust bid defence looks flimsy: a new management team and a weak track record of value creation since it was spun out of Prudential.

The absence of a stock exchange confirmation about Macquarie’s interest has removed the temporary ballast from M&G’s lacklustre share price, but I am reliably informed that a formal approach to its board is now not far away.