Broadening its reach in the investments field, Mellon Bank Corp. has agreed to acquire Founders Asset Management, a specialist in equity mutual funds.

Though terms were not disclosed, a well-placed source said Mellon is paying about $275 million for the company, which is based in Denver and manages some $6.7 billion of assets.

The deal marks Mellon's first big acquisition in investment management since buying Dreyfus Corp. in 1994, and it adds fuel to a push by the banking company to expand in equity funds. Dreyfus, which once leaned heavily toward fixed-income funds, has been steadily expanding in equity under Mellon.

The centerpiece of Founders is a family of 11 no-load equity funds, with $4.8 billion of assets. Combined with the Dreyfus offerings, the deal would leave Mellon with 48 equity funds, with $28 billion under management. And Mellon's total fund assets would reach $100 billion.

The public's heavy appetite for stock funds makes it crucial for Mellon to keep building its strength in that field, said Geoffrey H. Bobroff, a mutual fund analyst based in East Greenwich, R.I.

"The only thing that's selling right now is equities," he said. "If you have fixed-income, don't tell me about it-it's like selling ice in the winter," he said.

Mellon, which has a total of about $300 million under management, was especially drawn by Founders' strength in growth-oriented mutual funds.

"We really don't have a strong growth management team and Founders does," said Christopher M. "Kip" Condron, Mellon vice chairman and president and chief executive officer of the Dreyfus Corp.

"That's the only true void that we have from a product standpoint," he added.

The deal is subject to regulatory approval from the Securities and Exchange Commission and the Justice Department as well as a vote by shareholders.

Pittsburgh-based Mellon is one of several banks to snap up money- management concerns this year. Most notably, Fleet Financial Group in August announced a $600 million deal for Columbia Asset Management.

Mellon was not the only bank to look at Founders, a source said. First Union Corp., Fleet Corp., Deutsche Bank, and Credit Suisse First Boston all reportedly eyed the company at various stages.

Mellon, however, was the only bank left in the discussions during the last three months, said the source. Morgan Stanley Dean Witter & Co. acted as banker for Mellon, while Founders' interest was represented by San Francisco-based Putnam, Lovell & Thornton.

Unlike Fleet's acquisition of Columbia, Mellon is not approaching this from a "strategic perspective," said George Bicher, an analyst with BT Alex. Brown.

"They're not saying, 'Our core business has fundamentally slow growth, we need to branch out into a faster-growing area,' which is I think the logic behind what Fleet did," he said.

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