CAZENOVE, the 190-year-old City firm, today unveiled a takeover by JP Morgan in a £1 billion deal that will trigger windfalls for current and former staff.
Nearly five years after creating its JP Morgan Cazenove joint venture, the US investment bank is buying the 50% of Cazenove it does not currently own.
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 £19 million for his shares.
The joint venture, which made pre-tax profits of £134.5 million 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.
JP Morgan had until February to exercise an option to buy out its partner under the terms of their initial tie-up nearly five years ago.
Mr Mayhew described the joint venture with JP Morgan as a great success.
He added: "The agreement we have reached is a natural extension of our relationship. It builds on what we have achieved in the past five years and provides a platform for the next stage of development."
Cazenove demerged its fund management business, which provides advice to individuals, charities and institutions, in 2005.
In the turbulent period of "Big Bang" in the mid 1980s, which revolutionised the workings of the City, Cazenove retained its independence. It expanded domestically and internationally in the 1990s.