Cazenove suspension lifts sale speculation

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The Independent Online

Cazenove, the broker to the Queen and many FTSE 100 companies, has suspended trading in its own shares in a move which will heighten speculation that it is about to sell itself to a larger rival.

Cazenove, the broker to the Queen and many FTSE 100 companies, has suspended trading in its own shares in a move which will heighten speculation that it is about to sell itself to a larger rival.

The 180-year-old corporate broker decided to scrap the auction of its shares, which had been scheduled to take place last week, because it is in the process of evaluating several offers for its business from larger banks. The move - disclosed on part of Cazenove's website which requires a password to enter - has prompted those close to the company to believe Cazenove may be near to signing a deal.

The US investment bank Lehman Brothers is thought to be the front-runner to buy Cazenove, although Citigroup, JP Morgan and Merrill Lynch have also been linked to it. Barclays has also considered adding the stockbroker to its investment banking business, Barclays Capital, though the bank is thought to have stepped back from making a serious offer. Releasing dramatically improved annual results earlier this month, Cazenove said: "We are evaluating outline proposals which we have received from other firms. These are all being benchmarked against our existing strategy of remaining independent."

Cazenove issued shares to its staff when it ended its partnership structure. They can normally be traded in an internal auction for four days after Cazenove announces its quarterly results. The broker would not comment on its decision not to go ahead with the July auction, but it is thought to have said on its website it was because it was "in receipt of initial proposals" from possible bidders.

When companies are in offer periods, those with information about the process are not allowed to trade in the shares. It is, however, normal for employees of companies with no inside information to be allowed to buy and sell shares throughout the period.

As the City's most high-profile corporate broker, Cazenove may have decided to be particularly cautious and therefore not allow any of its employees to trade. The next date when trading is scheduled to take place is in early September, one month after Cazenove's quarter ending in July. That date could be superseded if Cazenove manages to hammer out a merger in the meantime.

The last time Cazenove's shares were traded - on 26 March - they were valued in the internal market at 350p, putting a price for the entire business at £762m. That is a significant discount to the £1.1bn price at which institutions such as Standard Life and 3i bought into the firm in 2001.

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