Icelandic raiders closing in on Singer & Friedlander

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The fate of Singer & Friedlander, one of the few remaining independent banks in the City, yesterday looked uncertain after it emerged that Iceland's biggest bank had more than doubled its stake in the company.

Shares in S&F, which have risen sharply in recent weeks, climbed 8p to 245p after confirmation of the move, which follows months of speculation that Kaupthing Bunadarbanki is interested in buying the British investment house.

Kaupthing confirmed it had bought more than 19 million shares in S&F, raising its stake from 9.5 per cent to 19.5 per cent.

Analysts believe Kaupthing, Iceland's largest company and one of the major lenders in the Nordic region, could either swallow the whole of S&F or try to win control of the Swedish investment bank Carneige, where S&F has a 31 per cent stake. However, such a move could not happen immediately. It said in a statementit had "no current intention to make a bid for Singer & Friedlander."

Under the City's takeover rules, this bars the bank from launching a bid within the next six months. However, if another interested party emerged, Kaupthing could also weigh in with a bid. Aberdeen Asset Management has in the past also been named as a possible bidder.

Kaupthing is seen as an aggressive and very profitable bank, listed on the Icelandic and Swedish stock exchanges. Over the past three years it has grown rapidly via a series of acquisitions. Its emergence on S&F's shareholder register a few months ago inevitably led to talk that it will soon bid for the bank.

S&F is thought to be vulnerable to a bid, having sold its UK stockbroker Collins Stewart to a CVC Capital Partners-backed management buyout for £122m.