Ex-barclays boss’s boutique bank in buyout talks with rival
Bob Diamond’s Panmure Gordon has engaged in ‘early’ discussions with finncap about takeover
A BOUTIQUE investment bank controlled by a former Barclays chief executive’s private equity firm has launched takeover talks with a rival.
Bob Diamond’s Panmure Gordon has engaged in “early” discussions with finncap about a potential tie-up, the broker said, as City stockbrokers seek to consolidate amid a prolonged slump in deal-making.
Shares in finncap, which is listed on London’s smaller Aim index, jumped by more than a quarter, valuing it at around £30m following the announcement.
It comes amid a severe drought in new stock market listings and other deal-making activity in the Square Mile, with the downturn forcing everyone from global investment banks to smaller and mid-cap brokers to cut costs.
In a statement, finncap said: “Discussions between the company and Panmure Gordon are still at an early stage. There can accordingly be no certainty that any offer will ultimately be made ... nor as to the terms on which any offer might be made.”
Under takeover code rules, Panmure has until Nov 15 to announce a firm intention to make a bid or walk away. The potential tie-up, which was first reported by Sky News, comes after a difficult year for finncap, which lost its longstanding chief executive during the summer and saw its share price slump by two thirds before yesterday’s rally.
Sam Smith announced that she was leaving in June, marking the departure of one of the few female chief executives in the City.
Following a partial buyout of JM Finn Capital Markets in 2007, which she led, Smith set up finncap and became chief executive, making her the City’s first female stockbroking chief.
Mr Diamond snapped up a majority stake in Panmure Gordon – which was previously listed in London – in 2017, five years after he stepped down as chief executive of Barclays.
The non-binding proposal from Panmure Gordon would involve it buying finncap for cash, with shareholders able to choose to receive partial consideration in shares.
A takeover of finncap would bring together one of the oldest names in the City – Panmure was formed in 1876 and was once run by the father of former prime minister David Cameron – together with one of the newest. Ms Smith has been one of the few vocal proponents of Brexit in the Square Mile.
Earlier this year, she told The Telegraph that more money is going into UK growth companies than ever before and the City is working “very well”, despite warnings that it would lose business and jobs to the Continent following Britain’s break with Brussels.
She said: “To me, Brexit has not been anything other than quite positive ... We are seeing signs that actually the regulatory regime could be changed in a positive way post-brexit to really make this ecosystem fly.
“We have had a great funding environment, there is lots of investment coming into the UK, there is money to back startups and scale up businesses. And that’s continued to come from overseas, which has gotten much better since Brexit.”
Finncap was also one of the first companies in the City to allow staff to take unlimited holidays last year in a bid to prevent staff burnout, a move that was later implemented by Wall Street giant Goldman Sachs.
Describing the rationale behind the policy, Ms Smith said: “The lockdown last January [2021] was a really, really bad one for people. Some just didn’t have it in them to really keep going.”
She added: “There’s not a maximum, there’s a minimum you must take. The rest is up to you. Burnout is not resolved by a quick two-week holiday. It is resolved by properly changing the way you work.”