Cater shares jump after bid talks revelation
Friday 06 June 1997
Sources close to the former discount house said a deal had been in the offing for a while, following a long slide in Cater's share price since it peaked at 630p at the beginning of 1994. The identity of the bidder remains under wraps, but analysts said yesterday it was probably a British bank keen to buy Cater's knowledge of the high-volume, low-margin short- term money markets.
With a net asset value of 340p, any bid is thought unlikely to exceed about 600p a share. Market speculation yesterday focused on Close Brothers or Schwab, although neither was thought to be able to provide the balance sheet strength that was probably the attraction of any deal to Cater. The bank has made it clear that discussions are over a recommended bid.
A takeover would put an end to Cater Allen's transformation from old- style discount house to a specialist small bank engaged in a variety of disciplines. The bank's interests range from execution-only stockbroker City Deal, which offers small investors trades as cheaply as pounds 9 a deal, to retail banking and fund management.
The main thrust of Cater's expansion has been out of wholesale and into retail financial operations, where James Barclay, the bank's chairman, recently said it was going "flat out". Like many banks, Cater has been keen to expand its fund management operations, which in the past decade have provided steadier profits than more volatile broking activities.
Cater Allen has struggled in recent months. Last November it announced a 40 per cent slide in pre-tax profits for the half year to October to pounds 5.6m. Mr Barclay blamed a wrong call on the previous month's interest rate rise and said sterling money markets had been the toughest in years.
Its execution-only stockbroking business had also suffered from the introduction of Crest, the electronic share settlement system, which pushed it into the red last summer. It had, however, been popular with investors, winning awards for its service and pulling in up to 1,000 new clients a week for its no-frills stockbroking offer.
A bid for Cater Allen would be the latest in a string of deals which have pushed almost all the City's independent banks into the hands of well-heeled institutions, mainly foreign banks. Venerable City names such as SG Warburg and Kleinwort Benson have fallen to European buyers, leaving only a handful of independent players.
- 1 Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 Zayn Malik on Israel-Gaza: One Direction singer bombarded with Twitter death threats after posting #FreePalestine
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Disney heiress Abigail disowns her share of family profits in West Bank company
Australian model Robyn Lawley stages naked protest against huge coal mine seven times the size of Sydney Harbour
Drew Barrymore’s sister Jessica found dead in her car surrounded by 'dozens of white pills'
The secret report that helps Israel hide facts
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...
£450 - £650 per day + competitive: Orgtel: My client, a leading bank, is curre...
£350 - £400 per day + competitive: Orgtel: Senior Analyst, ALM Data, Halifax, ...