F&C shares have jumped by more than 20% after the group said it has received a takeover approach from Canada's Bank of Montreal (BMO).
F&C shares jumped as much as 24.5% to 116p after the fund group revealed details of the possible takeover, which prices F&C at £700m.
"[F&C] confirms that it has received an indicative offer from BMO Financial Group of 120 pence in cash per ordinary share for the entire issued and to be issued ordinary share capital of F&C," the group said.
"F&C and BMO are in advanced discussions about the details of the Possible Offer and the board of F&C has indicated to BMO that it is likely to recommend a firm offer at the offer price."
Under the terms of the offer, F&C shareholders will also be entitled to a 2p per share dividend for the financial year to 31 December 2013.
BMO has until 24 February to table a firm offer for the group.
The bank's global asset management arm already has £78.5bn in AUM. A deal for F&C would add up to £90bn to that total.
F&C itself has been the subject of a significant amount of corporate activity since its takeover of Thames River in 2010.
Activist investor Edward Bramson (pictured) ousted Nick MacAndrew as chairman in 2011 and set about cutting costs and refocusing the business on investment trusts and fixed income.
Bramson stood down as executive chairman last August, F&C's share price having risen 25% since he took over.
The company has seen a number of senior personnel leave the group over that period.
It hired ex-Cazenove man Rob Thorpe to head its retail sales division at the end of last year, but figures including former Thames River CEO Charlie Porter and ex-head of retail John Yule are among those to have departed.
Partner Insight: For Blackfinch, the arrival of its IHT portfolio services was a 'natural evolution' in the group's offering and points to an established track record of returning cash to investors.
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