Regent calls for Hambros break-up

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The Independent Online
Hambros came under fierce attack yesterday from Regent Pacific, its new Hong Kong shareholder, which said the group should break itself up.

Jim Mellon, managing director of Regent, issued a thinly veiled warning that he was trying to assemble a group of like-minded shareholders to force the company to act.

Only a few days ago, Hambros and Regent had what appeared to be a conciliatory meeting in the wake of a previous round of criticisms by Mr Mellon.

Hambros confirmed that Mr Mellon wrote to Sir Chips Keswick, Hambros chief executive, on 11 September putting several proposals forward and demanding a reply by today.

Hambros said: "We are surprised and disappointed to see it in the press before we have had the opportunity to reply." Mr Mellon said of Hambros: "The thing is better broken up."

Julian Mayo, a Regent director in London, said later that Mr Mellon was referring to proposals to force Hambros to sell its 51 per cent stake in the estate agents and financial services group Hambro Countrywide and its 54 per cent stake in Hambro Insurance Services.

Mr Mellon also said that his preferred route was that the company should pay back a substantial amount of capital - as much as pounds 500m - to shareholders. Another pounds 100m should be realised from the sale of several venture capital businesses and a capital-intensive but unprofitable lending business closed down and the money returned to shareholders, Mr Mellon added.

Regent holds only 3 per cent of Hambros. But Mr Mellon said: "If they're unprepared to do that, we'll go to the other shareholders and solicit support for some kind of restructuring and I'm sure we'll be successful because they don't have a constituency of support."

Mr Mellon conceded that Regent did not, at the moment, have the means to buy the company, but he added "there are bits of Hambros that would demand a much higher price outside the current structure". Hambros had clearly been a big disappointment to its investors, he said. He believed Hambros was worth at least 350p a share after buying its stake at 242p. Yesterday the shares rose 0.5p to 260p.

The attack on one of the few remaining traditional merchant banks in London was launched earlier this month when Mr Mellon announced his 3 per cent stake and accompanied it with a broadside against Hambros, saying the board was beautifully decorated - containing a number of eminent figures - but in urgent need of repairs.