KBC looking to sell Peel Hunt at knockdown price
Sunday 20 September 2009
KBC, the troubled Belgian bank, has put its London brokerage and corporate finance house, KBC Peel Hunt, up for sale with the bank likely to suffer a huge loss on its investment.
The bank, which has been forced to borrow around €7bn (£6.3bn) in state aid from the Belgian government during the credit crisis, is looking for bidders for its Peel Hunt arm.
During the past few weeks, representatives from KBC have sought soundings in the Square Mile over likely interest in the broker, known for its coverage of the mid- and small-cap sector.
Peel Hunt was floated on the Alternative Investment Market in 2000 and was bought by KBC just 10 months later in a deal that valued the company at £218.5m.
The deal enabled Peel Hunt's founders, Charles Peel and Charles Holdsworth Hunt, to collectively scoop more than £70m on the back of the sale. But sources close to the company say that Peel Hunt is now likely to fetch a bargain basement price for its Belgian parent.
"They paid big bucks for Peel Hunt back in 2000," said a source. "They aren't going to get anything like the original price. I can't imagine there will be a queue of bidders around the block for it."
It is believed that a management buyout led by its current chief executive, Simon Hayes, is the most probable option for the sale of Peel Hunt, although others, such as the brokerage Collins Stewart, are thought likely to be interested in the business.
"KBC has put a lot of capital into Peel Hunt and it has done its best to integrate the broker into the wider business so whoever buys it is going to have plenty of unpicking to do," said a source.
KBC is currently in the midst of a group-wide strategic review and is preparing to submit a report to the European Commission in the coming weeks. Approval of the plan is expected by the end of the year.
Other assets likely to come on to the market in the coming months include KBC's Irish retail banking operation.
A spokesman for KBC refused to discuss the sale of the brokerage saying: "Any rumours concerning alleged divestments of KBC activities or assets are very premature."
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