JPMorgan eats up 1bn Caz leftovers
US INVESTMENT bank JPMorgan Chase & Co is expected to seal its £1bn buyout of the remainder of Cazenove today.
JPMorgan will pay around 500p per share for the last 50 per cent of the 190-year-old British brokerage, valuing the total business at £2bn.
The deal will land a multi-million pound windfall for many Cazenove luminaries past and present, including chairman David Mayhew, who is set to pick up around £19m.
The firm, often referred to as ‘blue blooded’ for its deep roots across Canada, has a host of loyal employees who have been at the business for decades and hold significant shares.
Mayhew and Naguib Kheraj, Cazenove’s chief executive, are expected to be given key roles at the US bank.
Also tipped for senior positions are head of equities Alan Carruthers, head of corporate finance Ian Hannam and head of capital markets Charles Harman.
In addition finance director Michael Power may take a top role.
The move represents the third major upheaval in Cazenove’s ownership structure in 10 years. Shortly before Christmas 2000, employees were told the organisation – which acts as stockbroker to the Queen – was shedding its partnership structure ahead of a planned stockmarket flotation.
The sale of shares was eventually scrapped in favour of a joint venture with JPMorgan in 2004.
Although Cazenove now has just 36 major companies on its list of clients, down from half the FTSE 100 five years ago, it has become a big player in fundraising.
In the past two years it has guided HSBC and Barclays through huge rights issues and is currently advising Lloyds Banking Group on its record-breaking £13.5bn cash call.
JPMorgan’s purchase of the second half of Cazenove’s business will herald a full-scale integration of the two operations, with job losses likely to follow as their equity teams are merged. The Cazenove name is expected to stay, however.