Cenkos chief tells Evolution to shake out its £140m 'piggy bank'

Newcomer twists the knife as rival's shares tumble and clients ship out
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The Independent Online

Evolution Group, the investment bank and stockbroker, is set to lose several important clients this week to recently formed rival Cenkos, whose chief executive, Andrew Stewart, publicly lambasted his opposite number's strategy.

Mr Stewart said that Alex Snow, Evolution's chief executive, should give a sizeable chunk of its estimated £140m cash pile back to shareholders. Shares in Evolution have fallen by a quarter in the past four months.

"Unless Alex Snow has some kind of cunning plan, I don't understand it," he said, referring to the £140m cash pile that the company had at the end of last year. "Stockbrokers should be stockbrokers. If you've got £140m earning 4 per cent in the piggy bank, you should give it back. The shareholders are saying: 'We'd like the cash back'."

Evolution reports its interim earnings on Tuesday. A company spokesman declined to reply directly to Mr Stewart's comments, but said that Evolution already has a share buyback programme.

Mr Stewart's comments are sure to inflame a bitter rivalry. Two Evolution clients are set to announce tomorrow that they have dropped it as their broker in favour of Cenkos. Others are set to follow. Cenkos, the most vocal of several firms hoping to profit from Evolution's weakness, also poached five directors from it earlier this summer.

Evolution's reputation suffered after a series of poor-performing deals and an investigation by the Financial Services Authority led to a management shakeup last year. Its drooping share price has rekindled talk that it could be a target.

"A takeover is where the value is," said one market source. "Their balance sheet is strong and there is a lot of value in their corporate client list."

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