Cazenove was valued at £546 million (€792.06 million) yesterday after its first internal auction of shares - half what it was worth just more than two years ago.
London's most influential independent stockbroker has been hit hard by the decline in the equity markets, which coincided with the firm's decision to expand its advisory and continental European operations. This week Cazenove said its profits before tax and exceptional items for the year to end-April had plunged 77 per cent to £14 million. Yesterday's share auction was the first time that shares in Cazenove have traded since the partnership was incorporated two years ago.
The firm had intended to provide liquidity for the shares by seeking a stock market listing, but this plan was dropped in January because of weak equity markets. An internal dealing facility was set up instead, which allows staff and the few institutions that own Cazenove shares to trade them.
More than 635,000 shares changed hands yesterday at 251p. With 217.6 million shares in issue, this values the 180-year-old group at £546 million. This is lower than newly-established stockbroker Collins Stewart Tullett, which has a market capitalisation of £777 million. Cazenove's new valuation is also in contrast with the 500p that a group of institutions paid in April 2001. This placing valued the business's equity at £1.1 billion.
Staff also bought shares at the time but paid less than 100p a share. Cazenove said this week the dividends on those shares had covered the financing cost of the loans taken out to purchase them.
The decline in Cazenove's fortunes has fuelled speculation that it may want to put itself on the market. But Mr David Mayhew, chairman, and Mr Robert Pickering, chief executive, are both very attached to the firm's independence.
This week, Mr Pickering said: "We're not interested in selling the business just for the sake of it. We still think there's value to be created in this business as we are." Seeking a stock market listing "remains the goal", he added. - (Financial Times Service)
