Shareholders launch attack to force broker to release cash

Rebel shareholders in Blue Oar, the City stockbroker, are set to table a requisition to the company's management calling for an extraordinary general meeting to vote on the winding up of the company. The trio are believed to be seeking the closure of the firm so that its £16m cash balance can be handed back to shareholders.

The revolt is being spearheaded by the company's former chief executive Edward Vandyk, former director Barrie Newton and the activist investment group Albany Capital.

It is believed that the rebels have spoken with Blue Oar's chief executive, the Oriel Securities founder Andrew Monk, who took over at the helm of the company in March 2007.

Filings show that Mr Vandyk, Mr Newton and Albany Capital enjoy a collective holding in the group of more than 14 per cent. It is thought that other shareholders may also have given their backing to the action.

One City insider said: "Blue Oar might be sitting on that £16m cash pile and it probably has one of the stronger balance sheets in a sector that is really suffering in the credit crunch. But it's got a pretty hefty cost base and it lost money in the first half of the year, so there have to be concerns about the group in the longer term."

No one from Blue Oar or the shareholder group could be contacted for comment on the action.

News of the attempted wind- up comes at a difficult time for Mr Monk, following his failure to snare rival WH Ireland earlier in the year.

Shares in Blue Oar have fallen from 25p to less than 8p over the course of the past year. This values the company at less than £15m in a sector that has struggled badly during the downturn.

Collins Stewart revealed last week that talks with a bidder, believed to be Japan's Nomura, had ended, sending the broker's share price down to just 58p. One year ago the Terry Smith-chaired company's price sat at more than 225p.

Arden Partners, the smaller-companies broker, last week revealed that its talks with Indian suitors, believed to include Religare, had come to an end, while Panmure Gordon revealed a pre-tax loss of nearly £20m, sending its price down to just 25p. The company now has a market capitalisation of less than £20m.

Shares in Evolution, the Alex Snow-chaired broker, also fell heavily last week, despite the company sitting on a cash pile of more than £120m.

A City source said: "Evolution goes on about its cash pile but it's being burnt pretty quickly in this environment. Shareholders should be looking to get their hands on that money else it'll be gone soon enough."

Mr Snow said at the company's half-year report last month that the cash pile could be used to mop up rivals in the sector "if they are sensibly priced".