Merchant bank may go to BHF for pounds 200m

CHARTERHOUSE, the merchant bank, is likely to be sold to a Franco-German grouping in which Berliner Handels-und Frankfurter Bank (BHF) is the largest shareholder.

The Frankfurt-based bank emerged yesterday as part of a consortium organised by Credit Commercial de France to buy the bank for a price expected to be above pounds 200m.

The search for a buyer for the London merchant bank arose after Royal Bank of Scotland and Charterhouse took a strategic decision to split, announced in March.

Royal plans a return to its core retail banking business and Charterhouse needs access to other markets outside the UK in order to expand its key businesses of venture capital, merchant banking and private and institutional stockbroking.

However, the negotiations with potential buyers have dragged on for months, leading to suspicions that price is a stumbling block at a time when merchant bank profitability is poor.

Agreement is thought to be some way off, because Royal is refusing to treat this as a fire sale. With TSB looking for a buyer for Hill Samuel, as the Independent reported yesterday, there could be a glut of merchant banks looking for European buyers.

BHF has many similarities to a British merchant bank. Analysts say it has an entrepreneurial outlook and specialises in the capital markets, investment management and banking for the rich.

At the end of 1990 BHF had assets of DM124bn ( pounds 50bn) and capital of DM4.77bn.

BHF said: 'Whether it is true or not you won't get a comment from us.' Charterhouse said: 'We can't make any comment on the speculation because of the position we are in.'

Plans for Royal Bank to maintain a stake in Charterhouse or for Banco Santander of Spain to join the consortium appear to be on the back burner.