UAM May Sell Pilgrim Baxter to Nationwide

United Asset Management Corp. said Monday that it is in talks to sell its Pilgrim Baxter & Associates Ltd. fund management unit to Nationwide Financial Services Inc.

Boston-based UAM is seeking as much as $600 million for Pilgrim Baxter and no agreement has been reached yet with Columbus, Ohio-based Nationwide, said people familiar with the talks. Pilgrim Baxter executives want to own a stake in the firm if a sale occurs, they said.

Pilgrim Baxter and Nationwide have been in talks for months, during a time when the performance of Pilgrim Baxter’s funds lagged. Its assets declined in the past year, to $12.4 billion from $16.6 billion.

Pilgrim Baxter is “a little bit damaged goods, though it could be turned around,” said Charles Burkhart, president of Investment Counseling Inc., a West Conshohocken, Pa., industry consulting firm.

At $600 million, UAM would be getting more than twice what it paid for Pilgrim Baxter and Newbold’s Asset Management Inc., which UAM purchased in 1990 and folded into Pilgrim Baxter in 1996, Burkhart said. “If I were UAM, I’d get used to selling too if I got those kind of [prices],” said Donald Yacktman, president of Yacktman Asset Management Co., a Chicago-based firm that held more than 2.2 million UAM shares at the end of June.