Canadian fund giant CI Fund Management has unveiled its plan to acquire troubled Amvescap, parent to the AIM Funds and former Invesco Funds, for $7 billion in cash, the Globe and Mail reports.

Amvescap has reportedly rejected the offer, but Martin Cross, an analyst with the London brokerage house Teather and Greenwood, said CI Fund's aggressiveness has opened a Pandora's box.

"Predators are circling for either a piece of the Amvescap group or possibly the whole thing," Cross told the Globe and Mail for the July 11 report.

Amvescap, which has a market capitalization of $5.63 billion, manages about $461 billion in mutual fund assets across the U.S., Canada and Britain.

Toronto-based CI Fund has long coveted its hometown rival AIM Funds, the report notes. While AIM represents a relatively modest portion of Amvescap's Canadian business, about 10%, it commands 38% of the parent company's operating profit.

But industry experts are saying that the two corporate cultures mix like oil and water, as CI is known for its bulldog tactics and a flamboyant CEO, while AIM is a very bureaucratic shop. Other potential suitors include Swiss-based UBS AG and U.S. banking giant Bank of America. AXA SA and BNP Paribas SA, both of France, have also been mentioned as potential buyers.

Amvescap's market cap is down 70% since 2000, a concurrent news report from TheDeal.com noted, largely as a result of poor performance across its mutual fund lineup and its involvement in the sweeping mutual fund trading scandal.

In 2004, Invesco and AIM paid $450 million to settle with regulators, who accused the companies of improperly allowing favored investors to market time their funds despite language in their prospectuses that prohibited excessive short-term trading.

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