F&C shares fall after Dawnay Day offload investments

The privately owned property and financial services group sold down its 26 per cent holding in F&C to approximately 6 per cent.

Friends Provident currently holds a 52 per cent stake in the company, which was put up for sale in January.

In May, Adrian Montague, chairman of Friends Provident, announced he was in talks with a limited range of buyers, but added he did not hold out hope of selling his stake in F&C until the third or fourth quarter of 2008.

Only a week after acquiring shares in F&C, Dawnay Day placed roughly 95m shares on the market at 100p through Icelandic bank Kaupthing.

It began building up its stake in F&C in February 2007 when the company looked undervalued.

But the recent market downturn and a number of redemptions contributed to the shares closing at 97.5p on 10 July 2008, its lowest level since the company was formed in 2004.

Last week, Morgan Stanley, Altium Securities and Numis challenged the group's strategy to boost margins and turn itself into an investment boutique.

Just over a year ago, the company revealed that it had a three-year turnaround plan to boost assets and win back profits.

The group said it hoped to increase its earnings-per-share by 50 per cent by 2009.

Mr Montague recently said the situation of selling the shares was more complicated than other planned disposals, such as Lombard, Friends Provident's European wealth management business, and Pantheon, a financial services intermediary.