For $1.8B, the Lead Bidder For Russell Is ...
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Friday, July 10, 2015

For $1.8B, the Lead Bidder For Russell Is ...

The Russell Investments [profile] deal may be close to done, and for about $1.8 billion to boot.

Saikat Chatterjee and Jessica Toonkel of Reuters report that, per unnamed sources, Beijing-based CITIC Group Corporation is now in the pole position in talks to buy the manager-of-managers from the London Stock Exchange (LSE). The $1.8-billion price tag translates to 0.66 percent of the $272 billion in AUM that Russell had as of December 31.

The LSE declined to comment to the wire service, while CITIC didn't respond to the wire service's request for comment.

CITIC dates back to the 1970s and the name originally stood for China International Trust and Investment Corporation. CITIC chairman Chang Zhenming calls CITIC "the biggest conglomerate in China." CITIC is backed by the Chinese government, has a market cap of nearly $330 billion, and has numerous arms in a host of different businesses, including: banking, mining, manufacturing, real estate, telecoms, and media, as well as asset management.

The LSE shelled out $2.7 billion last year for all of Russell, primarily to get Russell's index business. Earlier this year the exchange hired J.P. Morgan (and Barclays and Goldman Sachs, too, it appeared) to sell off the asset management side of Russell, and a month ago there were reportedly three bidders still in the running: another consulting giant, Towers Watson; China-based online game developer Shanda Games; and CITIC.

There's no new word on Shanda, but, as Reuters points out, it might be tricky for Towers to do the Russell deal now. Last week Towers and Willis Group unveiled a plan to merge in an $18 billion all-stock deal that is expected to close by the end of 2015.

Meanwhile, the reported price tag on the deal has gone up. As of a month ago, $1.5 billion was the figure being tossed around; now it's $1.8 billion, a twenty-percent increase.

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