Cenkos 'hostile' offer attacked by Close Brothers shareholder

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The biggest shareholder in Close Brothers, whose loyalty is crucial to the future independence of the British merchant bank, has broken cover to attack Cenkos, the banking minnow behind a 1.4bn approach.

Speaking for the first time about the "hostile" offer, Tim Ingram, chief executive of Caledonia, which has held 12 per cent of Close Brothers for 25 years, said: "This is as hostile as you can get. They [Cenkos] have gone entirely the wrong way about it.

"While we have to look after our shareholder interest, a proper bid, at a proper price, by a proper serious person, would be properly considered. But they haven't got any of those elements in this."

Close, which was founded in 1878, rejected the bid offer as "wholly inadequate" last month.

The comments will be a serious blow to Cenkos chairman, Andy Stewart, who last week embarked on a City charm offensive to win over Close's key investors. Ingram was the only shareholder to rebuff his overtures, but Stewart is hoping the investment chief will eventually come round.

Ingram is having none of it, virtually ruling out any hope of being persuaded otherwise.

"I think I was asked whether I would speak on the phone to someone or other, but I don't see that there is anything to discuss," he said. "It's not an offer for a start, and the price mentioned is way below what the business is worth."

The Cenkos offer values Close at 950p a share, and when asked if he might back a bid closer to the 11.58 figure mooted by an analyst last week, Ingram said: "If someone offered 30 a share, in cash, unconditionally, then of course we would talk to them."

Cenkos, which is a tenth of the size of Close, teamed up with Iceland's Landsbanki, to make its indicative cash offer last month.

While Close Brothers has refused to meet with Cenkos, in the past few days Cenkos said it was buoyed by discussions with other shareholders. Cenkos has accused the investment bank, which also owns Winterflood Securities, of underperformance.

Ingram does not agree: "I am surprised such a hostile approach has been taken to such a well run bank. It has got record earnings, the strongest capital ratios of any bank its size, and an excellent return on capital."