Britain's oldest independent finance house, Close Brothers, is set to remain autonomous for the foreseeable future after two suitors abandoned talks this week, sending its shares spiralling down to their lowest price in nearly four years.
The private equity giant Blackstone and Japanese financial group Orix pulled out of negotiations late on Thursday. Sources on both sides said the potential bids were derailed by disagreements over the company's value and uncertainties over current market conditions.
In a statement, Close said it was "no longer in discussions in relation to an offer for the group or any of its divisions". The news sent its shares down more than 12 per cent to 659p – its lowest price since October 2004.
A source close to the deal said: "The talks were quite far advanced. There had been a lot of due diligence but the different sides were unable to come to an agreement." The decision to walk away did not result from issues emerging during the due diligence process, he added. Another source said there was a "mis-match of ideas" over an offer price.
Blackstone and Orix are the latest to fail in an approach for Close. The Indian conglomerate Tata also held talks but withdrew before due diligence. Cenkos Securities sparked interest in Close after it teamed up with the Icelandic financial group Landsbanki to launch a 950p-per-share bid in November. Close dismissed the offer out of hand but opened its books when the consortium upped its price to 1,025p, valuing the company at £1.5bn.
The talks collapsed on 22 January when Cenkos walked away, claiming Close had obstructed its bid. "Senior Close management have given the impression of willing to engage but have in fact adopted a policy of obstruction," Cenkos said at the time. Close hit back, saying it "bent over backwards" to give its rival time to substantiate its offer.
Close Brothers will release its interim results on Monday.Reuse content