By Camilla Canocchi for Thisismoney.co.uk
10:59 28 Apr 2023, updated 10:59 28 Apr 2023
- The board of Numis has recommended a 350p per share offer by Deutsche
- Numis team will be combined with Deutsche’s London team
- This may result in ‘headcount reductions’ which are ‘not expected to be material’
City stockbroker Numis is set to be acquired by Deutsche Bank for about £410million in a sign that Germany’s biggest bank expects activity in London markets to pick up.
The economic downturn has slammed the brakes on UK deal-making, fundraising and stock market floats in the past year, hitting brokers like Numis, which advises a raft of FTSE 350 companies on doing deals and raising equity.
The London-listed broker said it has recommended shareholders to accept a 350p per share offer by Deutsche, which represents a premium of 72 per cent to Numis’ closing price of 204p on Thursday.
The unexpected news sent Numis shares 67 per cent higher to 341p in morning trading on Friday.
Numis will be combined with Deutsche’s London team, a move which may result in ‘headcount reductions’, which however are ‘not expected to be material’, the companies said.
Numis’ chief executives, Ross Mitchinson and Alex Ham, will lead the enlarged, combined UK business.
The senior management of the broker, which currently has around 344 employees, of which the majority in the UK, will also remain in the combined business as part of a ‘highly collaborative integration’.
Deutsche Bank said it intends to ‘co-brand with Numis for the relevant UK activities’, suggesting that the Numis brand will continue to exist in some form.
Numis, which was founded in 1989, has 166 corporate clients, of which 64 are part of the FTSE 350, or around a fifth of businesses listed on the index.
Luke Savage, the chair of Numis, said Deutsche’s offer represented ‘an attractive proposition’ for the company’s shareholders as well as a ‘significant opportunity for clients, employees and wider stakeholders’.
‘Numis Board is particularly pleased that Numis’ autonomy and independence are seen by Deutsche Bank as key contributors to its culture and the quality of its platform and that Deutsche Bank is focused on ensuring this is retained,’ he added.
Fabrizio Campelli, head of corporate and investment bank at Deutsche Bank, said the deal had the potential to unlock ‘significant value’ for both companies.
‘We have been evaluating how to accelerate the growth of our business in the UK and, as a leading UK franchise with a long history of successfully delivering superior client service and growth, Numis represents a compelling strategic fit,’ he added.
The Deutsche takeover of Numis comes amid a sharp decline in initial public offerings and equity raisings in London as economic uncertainty, high inflation and rising rates has discouraged some companies from going public.
Earlier this month, Numis reported a 14 per cent fall in half-year revenues to around £64million as a result of ‘weaker’ investment banking markets.
The company also predicted there would not be ‘any meaningful pick-up’ in new listing activity over the next six months, as concerns over high interest rates and inflation continued to dampen the mood across global stock markets.
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