Diamond joins Qataris to launch Panmure Gordon bid

Bob Diamond, the former Barclays chief executive, has teamed up with the investment vehicle of the Qatari royal family to launch a bid for Panmure Gordon, the lossmaking stock broker and investment bank.

Panmure, whose name dates back more than 140 years, is suffering like many mid-cap brokers from a number of structural challenges, including increased regulation, fewer deals and lower corporate retainers.

The deal may be viewed as a return to the City of London for Mr Diamond, who was forced out of Barclays in 2012 over the Libor rigging scandal.

Atlas Merchant Capital, the US investment firm created by Mr Diamond after he left Barclays, is teaming up with QInvest, which already owns 43 per cent of Panmure. The two are planning to control the broker jointly and to invest in trying to restore some of its former glory.

Their offer of 100p in cash per share is a 68.1 per cent premium to the 59.5p at which Panmure’s shares closed on Thursday, and values the company at £15.5m. Shareholders also have an option to receive unlisted shares in Bidco, the joint Atlas-QInvest vehicle making the acquisition.

The Qatari company paid £23m to win a bidding war for a controlling stake in Panmure in 2009. Its shares have fallen steadily since then, leaving it with a market capitalisation barely above £9m.

The broker, which swung to a £16.7m loss in 2015, has been battling grim market conditions and has shaken up senior staff.

The company has moved from a generalist approach to being sector-driven, in order to position itself for Mifid II, the EU directive that is reshaping Europe’s financial services industry and putting pressure on asset managers’ research budgets.

Ian Cameron, the late father of Britain’s former prime minister, David Cameron, was Panmure’s senior partner. But the once prestigious City firm has been the subject of repeated takeover speculation since its troubles started after the financial crisis.

“Against the backdrop of a challenging macroeconomic environment, with the resultant market volatility which has in recent years impacted Panmure Gordon’s business, the independent Panmure Gordon directors believe that the scheme price reflects a fair and reasonable offer,” said Andrew Adcock, chairman of Panmure Gordon.

Matthew Hansen, head of UK and Europe for Atlas, said there was an opportunity to “build a larger, successful boutique investment bank,” but he added: “This long term stabilisation and development can only realistically be achieved as a private company, out of the glare of the public market and the effects of share price movement.”

Mr Diamond will have no direct role at Panmure Gordon or at Bidco, either as an executive or non-executive, according to a person briefed on the deal. Mr Hansen will be its representative on the Bidco board.

Atlas Merchant Capital, which is expected to be the largest shareholder in Bidco, aims to broaden Panmure Gordon’s product offering away from its narrow focus on small-cap equities, according to the person.

The former Barclays chief recently announced Atlas Merchant Capital’s first European investment by announcing the planned acquisition of the Athens-based consumer finance arm of France’s Crédit Agricole.

The other venture that Mr Diamond launched after he quit Barclays, Atlas Mara, is a London-listed vehicle to invest in African banks. But its shares have fallen 80 per cent since it listed and its chairman and chief executive both recently stepped down. The Panmure deal was first reported by Sky News.

Bidco was advised by Hopton Advisers while Panmure Gordon was advised by Grant Thornton.