Banks eye Hill Samuel

A SOUTHERN European bank could emerge as a buyer for merchant bank Hill Samuel, which is up for sale following Lloyds Bank's takeover of TSB.

Sources close to the negotiations say Italian banks such as San Paolo di Torino, or the Spanish heavyweight Argentaria, are among those being touted as possible buyers, as well as the usual crop of German and French banks.

Phoenix Securities, which is advising Lloyds, is understood to be well advanced in marketing the business to European financial institutions. However, analysts believe Lloyds faces an uphill struggle to achieve a quick sale.

TSB itself tried to sell Hill Samuel some four years ago but was unable to find a buyer. The merchant bank has now made a significant recovery from the poor lending policies and ruinous bad debts in the recession. But the City also believes buyers for the whole of Hill Samuel will be hard to find, and the price may not be much more than pounds 100m, a fraction of what TSB paid in its ill-fated takeover of the bank during the stock market crash of 1987.

"It has already marketed the business around Europe one time. It will find it harder this time around," one analyst said.

Once one of the finest City names, Hill Samuel no longer boasts the corporate client base that attracted buyers prepared to pay premium prices for names such as SG Warburg, sold to Swiss Bank Corp, or Barings, where Dutch Bank ING stepped in despite the debacle of rogue trader Nick Leeson's losses.

Lloyds' success has been firmly based in its clearing bank business, and Hill Samuel staff have already experienced a clash of cultures with Lloyds' traditional high-street banking ethos.

Hill Samuel points out it has been rebuilding its corporate finance operations, and Hugh Freedberg, its chief executive, has been credited with restoring some pride to the bank. Recent high-profile deals include its role as adviser to the Government on the Channel Tunnel rail link.

The price depends on what is sold. Hill Samuel's total profits were restored to pounds 64m in 1995 and net assets stood at pounds 420.6m in October 1994. But Lloyds may retain a large proportion of Hill Samuel's corporate loan book and clients.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn