US investment bank JP Morgan Chase today announced a deal to take full control of Cazenove, a 190-year-old London stockbroker with Britain’s Queen Elizabeth II among its clients.
JP Morgan already owned 50% of Cazenove as part of a joint venture agreement struck five years ago and has now decided to take total control at a cost of £1 billion sterling.
‘Cazenove Group Limited and JP Morgan have agreed a transaction under which their joint venture, JP Morgan Cazenove, will become a wholly owned part of JP Morgan,’ the pair said in a joint statement.
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The deal will mean multi-million pound payments for many past and present Cazenove employees. There are 1,500 Cazenove shareholders, of which 20% are current staff and 54% are former employees.
It is thought that Cazenove chairman David Mayhew, who joined the firm 40 years ago and is one of the City’s best-known figures, will receive £19m for his shares. The joint venture, which made pre-tax profits of £134.5m in 2008, has advised on a number of the large rights issues in the London market in recent months.
These have included major fundraisings by HSBC, Rio Tinto and Lloyds Banking Group.
JP Morgan’s offer price of 535p a share represents a significant premium on the most recently quoted price of 245p a share earlier this year. The broker’s shares are not publicly listed.
