Fund manager Henderson Group is close to striking a cash-and-shares deal for New Star Asset Management, which values the struggling asset management group at £115 million.

Fund manager Henderson Group is close to striking a cash-and-shares deal for New Star Asset Management, which values the struggling asset management group at £115 million.

Henderson’s offer includes £21.6 million for New Star’s ordinary shares and £73.4 million for preference shares, in addition to a payment of £20 million to settle the company’s debt.

The deal will be funded through a combination of Henderson’s existing cash, the proceeds of a share placing of 72.3 million ordinary shares – equal to 9.9 per cent of Henderson’s existing shares – and the issue of new ordinary shares to New Star’s preference shareholders.

The company, which reported £49.5 billion in assets under management in December, said the deal would make it the fifth-largest UK retail fund manager, with more than £15 billion under management. However, the top ranking comes with one-off acquisition integration costs that are expected to total £31 million after tax.

New Star, which has been hit by “market movements and client redemptions”, now has just over £10 billion in assets under management.