Stockbroker finnCap Group has seen its shares jump higher after it confirmed a takeover approach by rival Panmure Gordon (PA)
(Picture: PA Wire)PANMURE Gordon, the storied City broker led by Bob Diamond, is in takeover talks with tech specialist finnCap in what could be first of many such deals.
With deal flow drying up and clients nervous, small and medium sized firms are likely to seek safety in numbers.
Speculation about tie-ups are bound to extend to Numis, Cenkos and perhaps Peel Hunt.
All have seen fees fall and are under pressure to cut jobs.
Panmure, one of the few remaining old style broker names, came under the control of Diamond and the Qatari royal family back in 2017.
It was hoped his network of middle east contacts and the skill of CEO Rich Richie, a former Barclays colleague, would revive the firm.
Panmure did manage to make a £3 million profit last year but has more usually been deeply in the red in recent years.
A takeover of Finncap would bring one of the oldest names in the City – Panmure was formed in 1876 and remains at the heart of the Square Mile at One New Change – together with one of the newest.
FinnCap was set up in 2007 and is based near the Museum of London. Its shares today moved up 3p to 17p, which values the business at £32 million. That suggests a bid of £40 million would probably succeed.
Finncap jobs in particular would seem to be at risk.
Following a report on Sky News last night, finnCap issued a terse statement to the market saying that it had received “indicative non-binding proposals” from Panmure regarding a deal. No financial details were revealed, beyond that it will be a cash deal with the option of some Panmure shares.
Under City rules, Panmure has until 5pm on November 15 to make a firm bid or walk away.
Finncap is most closely associated with Sam Smith, one of the few women to head a City of London broker. She stepped down as CEO in June, a surprise to many, saying she wanted to build a portfolio of non-executive roles and complaining that “I have not seen my daughter for five weeks”.
She had built finnCap over 24 years and was regarded as a modernising presence in many ways.
Diamond has always been a more controversial figure. In 2012, he was paid £17 million by Barclays, an amount that infuriated many, including some of his own staff. He was paid more than £100 million during his time at the bank.
Barclays was fined £290 million under Diamond’s watch for a “serious, widespread” role in trying to manipulate interest rates. The Financial Services Authority released email exchanges that had Barclays traders being offered bottles of Bollinger for “favours”.
Barclays had narrowly avoided a UK government bailout during the bank crisis by taking billions from Qatar. That later led to lawsuits and suggestions that Barclays offered Qatar money to buy its shares, something the bank denied.
Panmure was once run by Ian Donald Cameron, the father of former Prime Minister David Cameron.
Neither Panmure nor finnCap returned calls.
Panmure is controlled by Atlas Merchant Capital, Diamond’s investment vehicle.
