The Wall Street Journal reported a price tag of $3.9 billion
Marsh & McLennan Cos. Inc. (MMC) has agreed in principle to sell its Putnam Investments money-management unit for $3.9 billion, the Wall Street Journal reported Dec. 29.
The New York financial services firm is selling Putnam to the Montreal-based holding company Power Corp. of Canada, the newspaper said. The companies' agreement remains subject to approval from Putnam employees who own shares in the company, Putnam mutual-fund shareholders, and the board that oversees the funds. If the fund board and employees approve, a deal could be announced early next year pending fund-shareholder approval, the WSJ reported. The article cited people familiar with the matter.
Power Corp.'s emergence as the front-runner in the bidding, ahead of rivals Amvescap PLC of the United Kingdom and UniCredito Italiano SpA of Italy, was reported in the WSJ earlier this month.
Investors bid up Marsh & McLennan's stock nearly 0.5% to $30.87 in early trading on the New York Stock Exchange Dec. 29.
"We would have a favorable view of a sale, providing MMC with a chance to intensify focus on brokerage and risk management operations," Standard & Poor's Equity Research analyst Royal Shepard said in a research note. (S&P, like BusinessWeek.com, is owned by The McGraw-Hill Companies.) Shepard raised his target price on the stock by $1 to $35.
Marsh & McLennan was not immediately available for comment. Power Corp.'s offices were closed for the holiday season and nobody responded immediately to a message left in their general operator's mailbox.