Aberdeen Asset Management has said it is in discussions with Lloyds Banking Group over a possible acquisition of Scottish Widows Investment Partnership (SWIP).
The company said it would fund any acquisition through the issuance of Aberdeen shares to state-owned Lloyds, meaning the taxpayer could end up with a stake in the asset manager.
It is also proposing to make additional deferred payments in cash, conditional on SWIP's future performance.
Aberdeen shares spiked on the statement, rising over 5% to 447p having previously been flat on the day.
"The potential acquisition would add further scale and diversity to the company's product range, thus complementing organic growth, consistent with the Board's strategy," Aberdeen said in a statement today.
"The company would expect any transaction agreed to be materially earnings per share enhancing. It would also reinforce the company's commitment to a progressive dividend policy and to return surplus capital to shareholders over time."
Earlier this week IFAonline sister title Investment Week revealed Aberdeen, along with Australia's Macquarie Group, were the two remaining bidders for the asset management business.
The talks represent a U-turn for the FTSE 100-listed fund house, headed by Martin Gilbert; Aberdeen management said earlier this year it was 'extremely unlikely' the group would acquire SWIP.
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