Stock market recovery spurs Cazenove to revive float plan

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The Independent Online

Cazenove, the blue-blooded investment bank, is reviving plans to float as the stock market recovery strengthens.

Robert Pickering, the chief executive, was reported yesterday as saying that the 180-year-old company would put float plans back on the agenda "once the recovery pattern is well-established".

Cazenove, once the most dominant investment bank in the City, and one that counted royals among its world-class client list, abandoned plans to list on the stock market in January last year.

The turbulent stock markets and the halt in merger and acquisition activity made conditions for a float of the bank all but impossible.

Since then, however, stock markets have recovered, with the FTSE rising 13 per cent over the year. A number of large new issues have come to the stock market to list and corporate activity is beginning to pick up.

Mr Pickering said revenues at Cazenove had improved after a 77 per cent fall in profits last year.

One investment banker said yesterday: "Cazenove has to do something this year. They now have a lot of young partners who have bought shares in the business and want to make some money from them."

In July, Cazenove held an internal auction process for shareholders. Shares were bought at 251p each, which would have valued the company at £546m. This is far lower, however, than the £1bn price tag put on the business three years ago when it announced plans to float.

While Cazenove has openly considered floating, many in the City believe the best option will be a sale to another, larger bank. Mr Pickering said that although independence was the "key to what makes us different", he was not "religious" about it.

One banking source said: "A sale has got to be more likely than a float. Consolidation is already starting to take place among the banks, and although Cazenove is the last large independent, that is not really a strength any more."

Lazard, a rival independent bank, has been widely tipped as a likely interested party to boost its scale. It recently bought Panmure, the brokerage owned by the German bank WestLB. JP Morgan and Morgan Stanley are also thought to be possible suitors.

There is still some scepticism around the market about Cazenove's chances of floating.

"There is not much information on the company available to attract investors, and we know they had a pretty bad year in 2003," one banking analyst said yesterday.

"That is not much of a footing to come to the market with in valuation terms."