Era ends as Hill Samuel loses its deal-makers

A City era ended yesterday when Close Brothers took over the corporate finance business of Hill Samuel, which once did some of the biggest takeover deals in the London markets.

The purchase from Lloyds TSB for an undisclosed price brings a team of 60 people and 50 quoted clients to Close Brothers, a rising City star taking over one that has been fading since it was bought by TSB in 1987.

Lloyds TSB group continues to own Hill Samuel's corporate and private banking and fund management sides, which are far larger than the corporate finance team.

But the departure of the team ends a key link with Hill Samuel's glory days from the 1960s to the mid-1980s, when it was home of some of the City's best known corporate finance superstars, who at the time vied with Warburg at the top of the big league of takeovers and privatisations.

It has been an open secret that the Lloyds TSB group is uninterested in expanding its work in bids and deals, while Close Brothers has declared it wants to grow rapidly in the area.

Among Hill Samuel's best known 1980s deals were the privatisation of British Airways and the 1984 onslaught on Allied Lyons by Elders of Australia, the first pounds 1bn plus leveraged bid in the UK. Hill Samuel acted for Elders.

But by the time of Big Bang in 1986, traditional merchant banks were coming under heavy pressure to find new capital backing to compete with US investment banks and the clearing banks.

In 1987, Hill Samuel thought it had agreed a takeover by Union Bank of Switzerland. UBS pulled out at the last minute, leaving the London bank, then under Sir Robert Clark - its last chairman as an independent bank - floundering around looking for a partner.

On the rebound, it sold out to TSB in October 1987, at a price of pounds 777m which proved an extraordinarily good deal for shareholders because it was agreed just before the stock market crash.

However, under TSB's leadership, Hill Samuel went on a lending spree to large companies that in 1991 sent it pounds 440m into the red, and the bank and its corporate finance department never regained their former stature.

The corporate finance department then led the rescue of the Brent Walker group, one of Hill Samuel's ill-starred borrowers, but it failed to regain its high City profile. The team's best known recent work has included the National Lottery and the Channel Tunnel Rail Link.

Close Brothers, which is capitalised at pounds 450m, already has a small corporate finance team with 30 clients and about 20 staff.

John Llewellyn-Lloyd, head of Hill Samuel corporate finance, said the merged team would be comparable with those at other medium size merchant banks such as Lazard, Hambros and Charterhouse.

Start your day with The Independent, sign up for daily news emails
Voices
There will be a chance to bid for a rare example of the SAS Diary, collated by a former member of the regiment in the aftermath of World War II but only published – in a limited run of just 5,000 – in 2011
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm today
News
File: James Woods attends the 52nd New York Film Festival at Walter Reade Theater on September 27, 2014
peopleActor was tweeting in wake of NYPD police shooting
Sport
Martin Skrtel heads in the dramatic equaliser
SPORTLiverpool vs Arsenal match report: Bandaged Martin Skrtel heads home in the 97th-minute
News
Billie Whitelaw was best known for her close collaboration with playwright Samuel Beckett, here performing in a Beckett Trilogy at The Riverside Studios, Hammersmith
people'Omen' star was best known for stage work with Samuel Beckett
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
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

Carlton Senior Appointments: Private Banking Manager - Intl Bank - Los Angeles

$200 - $350 per annum: Carlton Senior Appointments: Managing Producer – Office...

Carlton Senior Appointments: San Fran - Investment Advisor – Ind Advisory Firm

$125 - $225 per annum: Carlton Senior Appointments: San Fran - Investment Advi...

Sheridan Maine: Commercial Finance Manager

Up to £70,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Sheridan Maine: Regulatory Reporting Accountant

Up to £65,000 per annum + benefits: Sheridan Maine: Are you a qualified accoun...

Day In a Page

Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'