LONDON — Stock in City of London stockbroker popped by a huge 70% on Friday after a surprise takeover bid from Barclays former CEO and the Qataris.
Bob Diamond, the former Barclays CEO synonymous with the heady days of pre-financial crisis investment banking in Britain, is returning to the City with a takeover of one of London’s most venerable stock brokers, funded by Qatari money.
Stockbroker Panmure Gordon announced on Friday that a takeover vehicle owned by Bob Diamond’s Atlas Merchant Capital and QInvest, the investment group of the Qatari royal family, has made a £15.5 million bid for the company. QInvest already owns 43% of Panmure.
Panmure is recommending shareholders accept the 100p per share offer, which represents a near 40p per share premium to Thursday’s closing price of 59.50p.
The deal has sent Panmure’s stock soaring over 70% in London. The price has in fact passed 100p, suggesting some in the market feel it could be sweetened further:
The shock bid marks a spectacular return to the City of London for Diamond, who has been investing in banks in Africa since his exit from Barclays in 2012.
Diamond joined Barclays in 1996 from First Boston and helped build its investment bank, Barclays Capital, into a globally renown operation. Diamond was synonymous with the kind of swashbuckling capitalism that defined global finance in the run-up to the financial crisis. Detractors accused him of “casino banking.”
The American became CEO in 2011 but resigned just a year later amidst a scandal over Barclay’s involvement in the Libor fixing scandal. The bank was fined £290 million for trying to manipulate the key benchmark interest rate.
Diamond set up Atlas Merchant Capital, a US investment firm, and Atlas Mara, a London-listed firm investing in African banks, after leaving Barclays.
Matthew Hansen, Head of UK and Europe for Atlas, said in a statement on Friday:
“We believe there is significant opportunity for Atlas, in partnership with QInvest, to apply our operational skills and financial services expertise to enhance Panmure Gordon’s strong reputation and build a larger, successful boutique investment bank. This long-term stabilisation and development can only realistically be achieved as a private company, out of the glare of the public market and the effects of share price movement.”
Panmure Gordon traces its roots back to 1876 and a large painting of the firm’s moustached founder, Harry Panmure Gordon, still hangs in the company’s St Paul’s headquarters. Three generations of David Cameron’s family were partners at the firm, which is regarded as one of the last remaining old-school stockbrokers in the City of London.
The company relies on market activity such as stock market listings and secondary share offerings but has struggled in recent years with a slowdown in activity and stricter regulation. The company made a loss of £16.7 million in 2015 and a pre-tax profit of just £300,000 in the first half of 2016.
Andrew Adcock, chairman of Panmure Gordon, said in a statement on Friday:
“The Independent Panmure Gordon Directors believe that the Cash Consideration will be attractive in providing Panmure Gordon Shareholders with an opportunity to exit at a significant premium to the current share price. Against the backdrop of a challenging macro-economic environment, with the resultant market volatility which has in recent years impacted Panmure Gordon’s business, the Independent Panmure Gordon Directors believe that the Scheme Price reflects a fair and reasonable offer.
“Accordingly, the Independent Panmure Gordon Directors unanimously recommend Shareholders vote in favour of the Scheme. We look forward to working with the management of Bidco to ensure an orderly Acquisition is effected in the best interests of all involved.”
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