BOSTON — It's open house at Putnam Investments, and money management firms intent on scaling up, expanding retail distribution or gaining a ready-made foothold in the U.S. are gearing up to drop by for a look.
If a sale results, alterations to the house, major or minor, will depend on the buyer.
In a Sept. 19 announcement, Michael Cherkasky, chief executive officer of Putnam parent Marsh & McLennan Co., New York, said MMC's board would test what the market is willing to pay for Putnam — reversing his earlier stance that MMC would hold on to the firm.
Neither Mr. Cherkasky nor Putnam Chief Executive Officer Charles "Ed" Haldeman would comment for this story.
While it's still early, many observers anticipate a transaction before 2007 in which MMC relinquishes a majority stake in the firm it bought for $30 million in 1970.
A recent report from Goldman Sachs & Co. on the best way for MMC to avoid facing a hefty capital gains tax said a spinoff would offer better value for the insurance broker's shareholders. Another report from Merrill Lynch & Co. favored a joint venture deal.
Bear Sterns & Co. pegged Putnam's fair value at $4.3 billion. However, one ex-Putnam executive, who declined to be named, said the higher end of valuations he has heard thus far is closer to $3.5 billion.
Investment bankers say it's impossible to predict which of the many names being mentioned as potential acquirers might emerge as a serious bidder. Among those on the list: Franklin Templeton Investments; Mellon Asset Management; AMVESCAP PLC; Morgan Stanley Investment Management; Nuveen Asset Management; Eaton Vance Management; Ameriprise Financial Inc.; Societe Generale Global Investment Management; and BNP Paribas Asset Management.
Officials at the firms declined to comment.