Loring Ward International Ltd. announced Tuesday that the pending sale of the company to Werba Reinhard, Inc. may not be completed, due to a drop in Loring Ward’s assets under management and administration (AUM/AUA).

One of the closing conditions of the transaction requires that Loring Ward’s AUM/AUA not have declined by more than 20% from June 30, to the date of closing of the transaction.

As at the close of business on Oct. 27, AUM/AUA had declined by approximately 30%, due to the extraordinary global equity market declines of the past two months, Loring Ward says.

The agreement between Loring Ward and Werba Reinhard contemplates the transaction being completed no later than Oct. 31, and given the current volatility in the marketplace, there can be no assurance as to whether or not this closing condition will be satisfied, Loring Ward says.

Due to the probability that AUM/AUA will not increase sufficiently by the closing date, Loring Ward say it has proposed to Werb Reinhrd renegotiating the sale price, which is currently US$18 a share, to US$15 a share.

“Based on Werba Reinhards’s initial response, it appears that a mutually-agreeable revised price is likely not achievable at this time. However, Loring Ward is continuing to pursue discussions with WRI at this time,” the company said in a release.

“Absent an attractive price for shareholders, now is not the time to sell a financial services business, if there is no need to sell,” said David Rattee, chairman of Loring Ward’s board of directors and special committee of independent directors.

“The fundamentals of our business have not changed,” said Robert Herrmann, president and CEO of Loring Ward. He added, “In fact, due to the conservative, diversified nature of our portfolio management approach, we expect our business to be even stronger once we get beyond this current bear market. In the meantime, excluding the non-recurring costs associated with the potential sale of the company, we continue to experience positive operating cash flow, and remain debt free and in strong financial condition.”

Loring Ward was previously known as Assante USA prior to the sale of Assante Corp. to CI Fund Management in August 2003 for $846 million.