Martin Gilbert, the City veteran, is closing in on a deal to take control of River and Mercantile Group (R&M) as he continues his latest quest to build a heavyweight asset manager.

Sky News has learnt that AssetCo, the vehicle headed by Mr Gilbert, could announce as early as Tuesday that it has struck a deal to buy R&M – where he sits on the board as deputy chairman.

City sources said on Monday evening that negotiations between the two parties remained ongoing and that a deal was not certain to be struck ahead of a Takeover Panel deadline of 5pm on Tuesday.

Mr Gilbert has been in talks to buy the business for about two months, and until recently was competing against Premier Miton, another listed fund manager.

If completed, it would be the latest – and largest – in a string of swoops by AssetCo since Mr Gilbert agreed a deal to use it as a consolidation vehicle last year.

R&M has more than £4bn under management in its asset management operation.

Last week, AssetCo said it believed R&M had “great potential…as an active equity and infrastructure investment manager”.

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“River and Mercantile has the people, expertise and product offering to be a core part of AssetCo as we build an agile 21st century asset and wealth management business that meets the needs of investors,” its suitor said in a stock exchange announcement.

The precise value of AssetCo’s proposed offer for R&M was unclear although on Monday shares in R&M closed at 296p, giving the company a market capitalisation of about £256m.

R&M is being advised on the deal by Fenchurch Advisory Partners, a corporate finance firm founded by Malik Karim, the Conservative Party treasurer.

Both R&M and AssetCo declined to comment.

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