And a poll of mutual fund investors, conducted for Liberty Financial by Louis Harris & Associates, finds a consensus that prices will only rise.

Liberty Financial manages $29 billion in assets.

Kenneth R. Leibler, president of Liberty Financial, said the transaction provided the size and variety of products necessary to compete.

Liberty Financial will make the purchase with $100 million in cash, stock in the new company and convertible preferred stock.

For each Colonial share, they can receive $40 in cash, one share in the new Liberty Financial or 0.77 share of new convertible preferred stock.

(Liberty Financial now markets a special mutual fund to clients as young as 11.)

Porter Morgan, a spokesman for Liberty Financial, would not discuss the transaction.

One reason European buyers might have been discouraged, a banker said, was that, because of several acquisitions, Liberty Financial consists of several separate companies.

The F.T.C. said Liberty Financial had not kept its promise that all data collected from users would be kept "totally anonymous."

"Liberty Financial supports completely the F.T.C. policy to protect the privacy of children," Mr. Thayer said.