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Blumont receives takeover bid from Integrated Asset Management

Date: Tuesday, May 23, 2006
Author: CBC.ca

TORONTO (CP) - BluMont Capital Inc. (TSXV:BCC) has received a takeover offer from Integrated Asset Management Corp., its biggest shareholder, after both companies reported improved second-quarter results.

Shares in BluMont surged almost 44 per cent, or 21 cents, to 69 cents after the announcement.

Stock in Integrated Asset Management (TSXV:IAM), which was also halted before the announcement, was unchanged at $2.

Integrated Asset Management, an investment company that owns 46.1 per cent of BluMont's shares, said Tuesday it will offer one-third of a common share for each share of BluMont.

Based on closing prices last Friday, the offer represents a premium to the BluMont share price of about 39 per cent, the Toronto-based company said.

"We believe this transaction will both simplify the capital structure as well as result in significant savings," Victor Koloshuk, CEO of Integrated Asset Management, said in a release.

"The shareholders of BluMont will receive a dividend-paying stock with enhanced liquidity in a more diversified business upon the successful closing of the transaction."

Integrated Asset Management also said its board of directors had approved an increase of 3.5 cents, or 40 per cent, to its regular annual cash dividend, bringing it to seven cents per common share from the current five cents. It will be paid on a semi-annual basis.

It also posted a second-quarter profit of $245,000, or one cent per share, reversing a loss of $260,000, or a penny per share, in the prior year's quarter. Revenues rose to $9 million from $4.9 million in the three months ended March 31, 2005, largely due to increased performance fees.

In a statement, BluMont chairman Thomas Simpson acknowledged the firm had received Integrated Asset Management's bid and said its board "will be establishing a committee to review the offer."

BluMont also released results Tuesday, saying it had incurred a net loss of $135,000, or nil per share, in the second quarter, ended March 31, compared with a loss of $448,000 or a penny per share in the same quarter last year.

Revenues increased 23 per cent to $2.7 million from $2.2 million because of increased performance fees.

BluMont specializes in hedge funds and offers investors innovative investment solutions. The company employs 40 people and has about $850 million in assets under management.

Integrated Asset Management has 280 employees and about $3 billion in assets under management.