Harris bid sparks Seymour break-up

Keith Harris, the football-loving chief executive of Seymour Pierce, is leading a management buyout of the investment banking arm of the company, as part of a break-up of the business.

The independent directors are also talking to a different party, believed to be New Star Asset Management, with a view to selling it the funds management arm.

The total deal values Seymour Pierce at about 5p a share. Yesterday the shares dropped 0.25p to 3.5p, valuing it at just over £26m.

Mr Harris, formerly the chairman of the Football League, originally launched a bid for the whole of the private client broking firm. He had planned to buy the business and simultaneously sell the fund management side, which has £3bn under management, to a third party.

The independent directors did not agree to that offer but they have given the go-ahead to Mr Harris' offer for part of Seymour Pierce. The management buyout is being financed by Jon Moulton's Alchemy Partners.

The group said Mr Harris had made the highest of several bids for the investment banking side of the business, which would be recommended by Seymour Pierce's independent directors.

The deal ends a period of uncertainty for the investment house, which is widely thought to have been up for sale since the middle of last year. There was speculation that the business received several bid approaches last summer, valuing it at up to £80m, which did not come to fruition.

Seymour Pierce confirmed in a statement that it had also received an approach for its asset management arm. If this is accepted the group said it would return "substantially all of the cash to shareholders".

Seymour Pierce's corporate clients include Chelsea Village, the football and hotels group, and Richard Desmond, the owner of Express Newspapers. Mr Harris, who was previously a non-executive chairman, stepped up to become executive chairman at the end of last year when the group began to run into financial difficulties. He took over the reins from John Mackay, the chief executive. Mr Mackay stepped down in the immediate aftermath of a profits warning.