Charterhouse sold to continental banks for pounds 235m

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The Independent Online
CHARTERHOUSE, the merchant bank which was put on the market by Royal Bank of Scotland last March, will announce tomorrow that it has been sold to two continental banks for a higher than expected price of pounds 235m.

The deal will give equal shares in Charterhouse to Credit Commercial de France and Berliner Handels-und-Frankfurter Bank (BHF). Royal Bank of Scotland will continue to hold a 10 per cent stake. The current management, led by Victor Blank, will stay on at the bank under its new ownership.

Although Royal put Charterhouse on the market last March, it has refused to sell it off cheaply. The delay in clinching a deal appears to have been the result of tough bargaining by the Scottish bank; analysts had expected Charterhouse to go for around pounds 200m.

Mr Blank, the chairman and driving force behind Charterhouse, was keen to find a continental buyer that would give the bank immediate access to European markets. He is aiming to copy the relatively successful partnership between Morgan Grenfell and Deutsche Bank, where business is fed to the merchant bank by its larger continental parent. Charterhouse's key businesses are venture capital, merchant banking and stockbroking. Mr Blank hopes the move will take Charterhouse into the first division of City merchant banks.

The split with Royal is amicable. The clearer wants to concentrate on its core business of retail banking but is keeping 10 per cent of Charterhouse to demonstrate its continued support for the bank.

Royal bought Charterhouse in 1985 and has invested about pounds 200m in building up its position in London. The merchant bank's profits quadrupled in the 1980s to pounds 42m by 1990, but profits slumped to pounds 21.2m last year because of the fall in merchant banking activity. This contraction and excessive competition in Britain has persuaded Mr Blank that the fast track to renewed growth is to penetrate continental markets.

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