Close Brothers fears deal-makers' exodus as salary lock-ins come to an end

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The Independent Online

Close Brothers, the mid-market investment bank, fears an exodus of staff next year when so-called salary "lock-ins" mature.

In January, Close offered all deal-making staff retention payments if they stayed until 2009. The move was made by chief executive Colin Keogh following concerns that staff were unsettled by bid approaches, which came to nothing, at the turn of the year.

A source said: "One of the concerns is that a number of people might leave, particularly if the market is more challenging than it already is this year. When the deal was introduced people suddenly stopped leaving the company."

However, an insider moved to play down the claim. He said: "People leaving is a possibility, but I don't think that will happen."

It is believed that there is a similar payout due at rival corporate adviser Hawkpoint. This was offered to retain staff in the wake of its acquisition by Collins Stewart in December 2006.

Cenkos Securities kicked off speculation over Close Brothers' future with an unwanted offer in November. Blackstone, the private equity giant, and Tata, the Indian conglomerate, were among others that circled.

A deal between Close Brothers and Cenkos broke down in January. Close Brothers was expected to fetch around £1.5bn, but the board pulled out of talks, believing that Cenkos could not back up its offer.