Hambros investors expect break-up announcement

Investors in Hambros yesterday believed the banking, insurance and estate agency group was preparing to break itself up to enhance shareholder value despite the company's insistence that press reports were "pure speculation". Hambros shares rose 12.5p to 246p as dealers focused on estimates that the group could be worth considerably more in separate pieces than as a whole.

A spokesman refused to comment on forecasts that it would reveal preliminary details of its plans when it announced half-year figures next month. City sources said Hambros was understood to have employed Schroders to help it put together break-up proposals.

Splitting the group up would mark another step in Hambros' deteriorating fortunes. Its reputation took a severe blow when it advised Andrew Regan in his failed attempt to take over the Co-Operative Wholesale Society earlier this year and it was criticised recently for its rejection of a bid for Hambro Insurance Services, in which it holds a controlling 52 per cent stake.

The bid from Fisher International was pitched at 128p a share but since its rejection the price has fallen below 100p. That has irritated shareholders in Hambros, including Regent Pacific, the Hong Kong-based fund headed by Jim Mellon, which owns 3.5 per cent of the group.

William Philips, a director of Regent, said yesterday: "Many shareholders, including ourselves, would like to see a break-up and would welcome it. Hambros suffers from a conglomerate discount."

He said Regent had been disappointed that Hambros had rejected the approach from Fisher International.

Regent has been lobbying Hambros to break itself up for some time and believes the group could be worth as much as 350p a share.

Hambros shares have underperformed the market by almost 35 per cent in the past year and have dropped from a peak of 458p in 1994.

Since January this year they have slipped from a high of 268p at a time when the banking sector has performed strongly.

- Tom Stevenson