Cazenove link in doubt

John Shepherd
Sunday 03 July 1994 23:02
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CAZENOVE may have to consider its long-standing role as broker to Enterprise Oil in the wake of the company's failed pounds 1.6bn takeover bid for Lasmo.

Cazenove, the blue-chip stockbroker, did not become involved in the bid - it had conflict of interests as it was broker to both companies.

But a conflict still remains despite the failure of the takeover attempt, since Enterprise picked up a near-10 per cent stake in Lasmo during the final stages of the bid which closed on Friday.

Cazenove's decision will be anxiously watched. There are also rumours that Enterprise may drop most, if not all, of its team of bid advisers.

Institutional shareholders were furious about the company's purchase last week of most of its Lasmo shares from PDFM, the fund manager, at 169p each against a stock market price of 148p.

Enterprise's advisers were S G Warburg, James Capel, Lehman Brothers and Robert Fleming.

Warburg, the merchant bank, and Capel, the stockbroker, may take the brunt of the City's backlash against the handling of the bid and purchase of shares.

A spokesman for Enterprise said yesterday that he had heard of no reason why Capel should resign as brokers over the share raid, which left some institutions complaining that they were not given an opportunity to sell.

There are signs, though, that Enterprise is unhappy about the advice given by Warburg.

A member of the losing side, quoted in yesterday's Independent on Sunday, said: 'The bid failed because one adviser dominated the entire campaign. The structure of the offer was entirely Warburg's creation, and they were also behind the presentation of Enterprise's arguments for the bid.'

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