Ex-Barclays boss Diamond to stun City with Panmure Gordon bid

(c) Sky News 2017: <a href="http://news.sky.com/story/ex-barclays-boss-diamond-to-stun-city-with-panmure-gordon-bid-10804031">Ex-Barclays boss Diamond to stun City with Panmure Gordon bid</a>
 

Bob Diamond, the former chief executive of Barclays (LSE: BARC.L - news) , is staging a stunning comeback into the heart of the City of London (LSE: CIN.L - news) by launching a takeover bid for Panmure Gordon, one of Britain's oldest stockbrokers.

Sky News can reveal that a vehicle backed by Mr Diamond and a Qatari investor are close to announcing an agreed takeover deal that will see Panmure delisted from the London stock market and taken private.

The move, which is expected to be announced in the coming days, will catapult the former Barclays chief back into the financial services establishment nearly five years after he was ousted as the bank's chief executive by Mervyn King, the then Governor of the Bank of England.

Sources said on Thursday night that Atlas Merchant Capital (AMC (Taiwan OTC: 3585.TWO - news) ), Mr Diamond's private equity firm, and QInvest - the Qatari investment bank which already owns 43% of Panmure, will create a bid vehicle to make an offer for the broking firm.

Other Panmure investors will be given the chance to retain part of their shareholdings but most are expected to take cash, leaving AMC and QInvest owning the firm roughly equally.

Panmure's shares, which are thinly traded in the London market, closed unchanged on Thursday at 59.5p, giving the firm a market value of just £9.25m.

The precise value of the offer to be made by AMC and QInvest was unclear, although one insider said it would be at a substantial premium to Thursday's close.

Panmure's tiny valuation belies the proud history of one of the City's most prestigious names.

Ian Cameron, the late father of former Prime Minister David, was Panmure's senior partner, while the two previous generations of Camerons also worked for the firm.

The return of Mr Diamond to a prominent City name is particularly intriguing given his firm's partnership with investors from Qatar.

A Serious Fraud Office probe into Barclays' capital-raising from Qatari investors during the 2008 banking crisis is nearing a conclusion, with a number of the bank's former senior executives expected to learn shortly whether they will face charges.

Mr Diamond, who earned tens of millions of pounds building Barclays into one of the world's investment banking powerhouses, is not among those who have been under investigation.

He became one of the best-known bosses in Britain in 2012 when he was forced out of Barclays shortly after it was fined close to £300m for its role in the global Libor-rigging scandal.

Since then, he has staged something of a comeback, setting up AMC and listing Atlas Mara - a consolidation vehicle for banking operations in sub-Saharan Africa - in 2013.

Its shares have performed poorly, however, and last month it replaced its chief executive.

Mr Diamond's interest in a takeover of Panmure is said to have resulted in months of talks about a deal, although he is not expected to be directly involved in its management if the takeover is completed.

It is understood that Mr Diamond has identified an opportunity to expand Panmure's range of investment banking services at a time when many companies are turning increasingly to 'boutique' firms for corporate finance advice.

Panmure has struggled in recent years amid growing competition among broking firms to work on new company listings, share issues and takeovers.

It has also been affected by regulatory reforms introduced after the financial crisis, particularly those which have hit fees earned from producing company research.

There have been recent indications of a revival of its fortunes, however, with Patric Johnson, the chief executive, able to announce a return to profitability in the first half of the financial year just ended.

It has worked on deals including the initial public offering of Loop-Up, a software company.

In January, Mr Johnson said: "Panmure Gordon has been very active for our corporate and institutional clients throughout 2016 despite the unpredictable political and macro-economic environment.

"Our pipeline for 2017 is strong and, notwithstanding an uncertain market with continued political and economic uncertainty, we look forward to 2017 with measured confidence."

Panmure is due to release full details of its 2016 performance on 28 March.

The broker has been the subject of perennial takeover speculation in recent years.

Last summer, the City financier Mehmet Dalman was reported to be assembling a bid for the 140-year-old firm.

A spokesman for AMC declined to comment, while Panmure could not be reached for comment.

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