F&C Management said BMO has proposed a bid of 120 pence per share in cash for the firm and the two are in "advanced discussions" regarding a possible offer.
However, the investment manager cautioned that a firm offer has not been made.
BMO has until Feb. 24 to announce either a firm intention to make an offer for F&C Management or that it doesn't plan to make a bid.
"The announcement was put out with our consent in accordance with U.K. regulatory requirements," BMO spokesman Paul Deegan said in an email.
The bank declined further comment.
Canadian banks have been beefing up their wealth management businesses in recent years.
At a recent banking conference, BMO chief executive Bill Downe said the bank was prepared to grow its wealth management business through acquisitions if the right opportunities were available.
F&C Management traces its history to the launch of the Foreign and Colonial Investment Trust in 1868.