Lazard, the investment bank, finally clinched a deal yesterday to buy the broker Panmure Gordon from its current owner, WestLB, for £10m. The business, which will continue to operate as an independent entity, will come under Lazard's enlarged capital markets operation.
It will be jointly run by Richard Wyatt, who joined Lazard from Citigroup in November, and Tim Linacre, who is currently chief executive of Panmure.
Lazard has been negotiating with Panmure for more than two months to strike a deal that would see the 127-year-old broker's six senior managers move to its new owner. The rest of Panmure's 70 staff will also move to Lazard and the business will retain its name.
Mr Linacre, who considered at least five offers for Panmure, said: "The management was entirely united in believing that this was the best transaction."
Other companies which approached Panmure since its German parent put it up for sale in September included Durlacher, the former dot.com specialist which is turning itself into a conventional investment bank, the investment boutique Bridgewell Securities, and Teather & Greenwood.
Lazard's approach surprised some in the City, who felt Panmure was too small to fulfil the bank's ambitions of attracting major new clients to its corporate advice arm through its broking division.
However, Marcus Agius, the chairman of Lazard in London, said Panmure would significantly broaden the services the bank could offer clients.
"With the dearth of first-rate independent corporate brokers in the UK and Europe, plus the supportive ownership of Lazard, I am confident this enhanced business will enable us to offer clients a full range of independent and objective counsel," he said.
The deal is Lazard's first significant acquisition since Bruce Wasserstein was parachuted in two years ago to head the bank, after he had a difficult time trying to sort out the many problems of Dresdner Bank.
It is seen as a blow to Cazenove, which acted as broker to many Lazard clients and was seen as a possible merger partner. Despite persistent rumours of talks between the two, however, Cazenove has maintained it wants to remain independent.
While the £10m Lazard is paying for Panmure looks much lower than valuations of £50m which were doing the rounds a few months ago, the lower price reflects the fact that Panmure has unwound debt positions worth about £40m which Lazard would otherwise have had to take on.
WestLB has sold Panmure as part of a wider shake-up of the group that will see it concentrate more on its core retail banking functions in Germany.