Mahon bank to be sold

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The Independent Online
GUINNESS MAHON - one of the oldest names in British banking - is set to be sold to Investec, the South African bank, for around pounds 100m.

The deal raises the spectre of job cuts at the two organisations, particularly at Henderson Crosthwaite, Guinness Mahon's stockbroker, and Carr Sheppards, Investec's stockbroking arm.

The Bank of Yokohama (BoY), Guinness Mahon's Japanese parent, announced yesterday it was in "exclusive negotiations" with Investec over the sale. David Potter, Guinness Mahon's chief executive, said he expected the two parties to sign an agreement "imminently, probably some time next week". Mr Potter and his opposite number at Investec celebrated last night at a champagne reception at Guinness Mahon's offices.

Bernard Kantor, group managing director at Investec, said the acquisition of Guinness Mahon would allow his company to achieve "a critical mass" in key banking and broking markets. He added the purchase would add both an institutional broking and a corporate finance business to his bank.

One of the main areas of overlap between the two groups is in stockbroking, and neither Mr Potter nor Mr Kantor ruled out the possibility of job losses. Mr Potter said some areas of the two groups needed to be integrated, and that any process of rationalisation would be done "quietly, gently and in a professional way".

The banks did not disclose Guinness Mahon's price tag, although sources close to the deal said the price was likely to be around pounds 100m.

Mr Potter declined to discuss his likely role within the new organisation. "We have a lot of work to do ... there will be more announcements in the coming weeks," he said.

Investec is to buy the entire Guinness Mahon group, including its stake in Guinness Flight Hambro Asset Management, a joint venture with Hambros. It is not yet known whether Investec will also seek to buy Hambros' stake.