Gartmore's shares slumped 9.35% this morning to 95p, pushing the fund manager to top of the losers' board across the whole of the FTSE350.
The fall follows reports over the weekend that Henderson Global Investors had made a 95p per share bid for the group.
According to reports in the Financial Times, Henderson has made a conditional offer, which is a discount to Gartmore's closing share price on Friday of 104.8p. The offer values Gartmore at £344m in total.
This would be paid in a mix of cash and Henderson shares, according to people close to the talks. Henderson's shares are up 2.76% this morning, putting the fund group in the top ten list of FTSE winners.
Gartmore CEO Jeffrey Mayer is believed to be keen to complete the deal by the end of the year but there is no certainty of its success, according to the Financial Times.
According to reports, Gartmore also received two other offers from fund manager GAM and Japanese financial conglomerate Sumitomo.
However, talks are now exclusively with Henderson which commentators believe could use the deal to bolster its hedge fund presence. The talks come a year after Henderson acquired under-fire New Star Asset Management for £115m in a similar rescue takeover.
Henderson already has a significant stake of 14.2% in Gartmore through funds managed by Stephen Peak.
Gartmore put itself up for sale last month after a torrid year for the firm. Guillaume Rambourg, who co-managed Gartmore's hedge fund business with star manager Roger Guy, was suspended in March for breaching internal trading rules, He later resigned to concentrate on fighting an FSA investigation into the incident.
In November, Guy, who managed 16% of Gartmore's £20.9bn client assets, announced he would retire on the same day as CIO Dominic Rossi moved to Fidelity.
Gartmore's share price has been badly hit by the stream of negative headlines and has fallen by more than 50% from a listing price of 230p in January.
The fund manager is still 20% owned by private equity group Hellman Friedman, which bought it out after it had been passed around owners including Banque Indosuez, NatWest and Nationwide Mutual.
An ambitious objective
'Something completely new'
'Illusion of control'
Reasons to be cheerful
Total investment reaches £9m