BNP Paribas embarrassed by leak of takeover talks with Close Brothers

Close Brothers, the independent quoted UK investment bank, has been the subject of an early-stage takeover approach by BNP Paribas, the French bank.

Close Brothers, the independent quoted UK investment bank, has been the subject of an early-stage takeover approach by BNP Paribas, the French bank.

It is understood that the reaction of Rod Kent, the chief executive, was that Close is determined to remain independent. However, the door was left open for further talksif the position changed. Close Brothers has a market value of £1.7bn but would probably go for more than £2bn.

The leak of the approach is embarrassing for Paribas, which hoped to keep the discussions low key and friendly. However, the approach became difficult to keep under wraps after a surge in Close Brothers' share price sparked market speculation yesterday that it was in takeover talks.

Close Brothers refused to comment. However, Mr Kent said after unveiling record profits last week that the firm was determined to stay independent. Paribas, too, refused to comment, but a source familiar with the matter said last night: "The bank was in the running for Charterhouse [sold to ING Barings] and is obviously interested in an imprint in the UK."

There was speculation last night that the leak may imply different views in Close Brothers' boardroom about the future. They said the fact that Winterflood Securities, the market-making firm, contributed most of last week's full-year profit growth may have sparked tensions.

Close is understood to have had a number of approaches about buying Winterflood Securities. The most recent was from Charles Schwab, the American online broker.

Paribas is seeking to rebuild its operations after a mass of defections during and after last year's three-way French bank bid battle. It has suffered further setbacks as a result of raids on its personnel by Dresdner Kleinwort Benson.