Ducat Ventures Share Discussion Threads

[tooredtobleed] 08/2/2005 14:56

presumably the sharks already know they have the percentages sorted

[dionis] 08/2/2005 14:52

From what I understand DUC shareholders must vote 75% in favour of the deal. Is this correct? If one assumes that the institutional shareholders are not stupid and that both the former CEO's (who between them have c.6%) have axes to grind against Tony Caplin and his rip-off merchants, then surely the deal is destined to fail the 75% rule. Any thoughts?

[wanchope] 08/2/2005 10:16

agreed.surely this will not go through!!!!!!!!

[chapchip] 08/2/2005 09:49

as ususal the PI gets shafted by the fat cat directors.........

[michaeld] 08/2/2005 09:42

Excellent article adho and sums up exactly my own feelings about this merger.
ie It's a very good deal for Durlacher and Panmure Directors (I really don't know how they have the cheek to advocate this?) but a bad deal for Durlacher shareholders and I shall be voting against it. Much better terms for shareholders could be achieved by selling to the highest bidder in todays market for stockbroking firms imho.

[adh0] 07/2/2005 20:42

Small Talk: Durlacher shareholders should question merger
Pharmagene trouble; Oxford plans studied; FDC deal oddity; IQ to be tested
By Stephen Foley

07 February 2005

Durlacher shareholders aren't really going to agree this proposal to merge with Panmure Gordon, are they?

The long-awaited combination of the two stockbrokers was unveiled last week with a few surprising details. Panmure's current owner, Lazard, and Durlacher's existing shareholders will each hold a one-third stake in the bigger company, suggesting that they have agreed that Panmure's value is equivalent to that of pre-merger Durlacher. The other third will be given to the employees.

The ability to incentivise staff with equity is, of course, one of the great benefits of a stock market listing, but it is hard to imagine circumstances where it is acceptable to give away new shares equivalent to half the agreed value of the company.

As far as Durlacher shareholders are concerned, their business will be worth twice as much but with three times as many shares in issue. Unless you believe that the combination of Durlacher and Panmure will immediately create a new powerhouse in British broking (the reality is more modest), then you have to bet that Durlacher shares will fall steeply on their return from suspension.

And then there are the details of the deal that are yet to be publicised. Most intriguingly, just how will that one-third of employee shares be split? Every member of staff has been promised equity, but senior management will get more.

The companies say that there has not been a final decision on the split, but the rumour is that the top four executives (Richard Wyatt and Tim Linacre from Panmure and Simon and Julian Hirst from Durlacher) will share 25 of the 33 per cent. If that turns out to be anything close to the truth, then it really ought to be questioned by shareholders. The granting of large numbers of free shares to members of Durlacher management gives them a strong incentive to pursue this deal over any other that might emerge.

And that is the final area of interest. On the same day last week, Teather & Greenwood - another of the City's small stockbrokers - was taken over at a racy valuation. This is already shaping up as a year of consolidation in the stockbroking sector, where business is returning to healthy levels. With its £49m of tax losses and a handful of successful flotations recently behind it (NETeller and DAT, for example), Durlacher could well be in the sights of potential predators.

The company needs 75 per cent of its shareholders to agree to the merger with Panmure. It is a high hurdle for a poor deal.

[rkd9] 04/2/2005 12:01

Thanks michaeld.

[michaeld] 02/2/2005 23:00

RKD9; I have read that the company is due to be relisted as Panmure Gordon but that the smaller companies operation will continue to use the name Panmure Durlacher or something like that.
Dealit; I guess that the deal will have to be approved by shareholders first and we should get some paperwork soon; if the nominee co's will pass it on? I am going to request mine.

[dealit] 02/2/2005 18:00

When will the shares start trading

[darias] 02/2/2005 17:41

If the new group is valued at 60m there is nothing there for existing shareholders. Why would they vote for the merger?

"The merged group will have combined revenues of about £35m and operating profits of £15m-£20m, although there will be an unspecified amount of exceptional costs related to the merger to be written off in the company's first year."

If these figures are right and we must assume that they are as these figures can easily be found with a little research a market cap of 60m seems to me to be far too low. Even with profits of 15m in a normal year the p/e ratio should be more than 4!

I would go for the 100m figure myself which would value the shares at around £1:55 or so.

[shirishg] 02/2/2005 13:40

Post removed by ADVFN

[rkd9] 02/2/2005 13:30

Will the shares be relisted as Durlacher..anyone?

[adh0] 02/2/2005 13:15

That is from todays Independant. I have seen values quoted from £40m to £100m now. I think it will be £60m myself once shares relisted, but who knows.

[adh0] 02/2/2005 13:14

02 February 2005

Panmure Gordon's plans to merge with its smaller rival, Durlacher, will create a combined stockbroking business worth up to £100m, with Panmure's senior management expected to own about 10 per cent of the enlarged group's shares.

Richard Wyatt and Tim Linacre, the chairman and chief executive of Panmure, will retain their roles after the merger and are rumoured to be sharing a stake equivalent to up to 10 per cent of the new business. Neither would comment yesterday on the exact terms of deal.

Mr Linacre said: "Lazard has been a very supportive parent during 2004 and early 2005 and during this transaction."

The merger is a remarkable turnaround for Panmure, which changed hands for nothing last year when it was sold to Lazard by WestLB.

The merger with Durlacher will now give Lazard a 33 per cent stake in the new group; a holding which could be worth more than £30m. Another one-third of the group's shares will be held by Durlacher's existing shareholders and quoted on the stock market, and a further one-third by the company's employees.

The new group, which will bring the Panmure Gordon name to the stock market for the first time in its 128-year history, will have 99 corporate clients ranging from large, FTSE 100 companies - such as WPP, the advertising agency group, and Associated British Foods - to small, AIM-quoted companies.

Panmure provides research and makes markets in the shares of more than 400 companies. Durlacher researches 75 companies and makes markets in 90. The merged group will have combined revenues of about £35m and operating profits of £15m-£20m, although there will be an unspecified amount of exceptional costs related to the merger to be written off in the company's first year.

There will also be £48m of tax losses in the business inherited from Durlacher, which management will be able to offset against future profits.

The transaction was being couched yesterday as the reinvention of the traditional, independent UK stockbroker which virtually died out after the Big Bang in 1986.

However, other independent brokers have recently sprung up in the City, although the combination of Panmure and Durlacher is expected to provide the group with sufficient critical mass to compete. It will also have an ongoing business relationship with Lazard as a potential source of new business referrals.

[michaeld] 01/2/2005 18:06

Yes, I don't agree with a third of the shares being given to employees ( for that read Directors?) and shall vote against it unless they are putting up cash for their share. It looks like a 'rip off' deal for Durlacher shareholders? In my opinion such incentives ought to be related to future performance and certainly not that generous.

[fatnacker] 01/2/2005 07:57

mmmmmmmmmmm a third given to the employees trust fund , new name same old durlacher.

[adh0] 31/1/2005 23:30

I think that would make our stake about £1.40ish. Not great but not bad since it was WELL under £1 not long ago. More stability and prospects too I think.

[michaeld] 31/1/2005 23:21

Thanks for printing that adho.

[adh0] 31/1/2005 23:13

Lazard to retain Panmure stake

Richard Wachman
Sunday January 30, 2005
The Observer

Lazard, the investment bank headed by Bruce Wasserstein, will surprise the City this week when it discloses that it intends to retain a 30 per cent stake in its corporate broker Panmure Gordon, which it is merging with smaller rival Durlacher.
The deal, to be announced this week, will see Durlacher become part of Panmure. The combined group will be valued at £80 million and floated on the junior AIM market.

When the plan surfaced three weeks ago, observers had expected Lazard to dispose of Panmure altogether. Lazard faced criticism when it bought Panmure from Germany's WestLB for £10m just 12 months ago. The aim was to use the broker as a way of cross-selling merger and acquisitions advice. But critics said the transaction would bring potential conflicts of interest.

In the event, Wasserstein has decided to press ahead with plans for a multi-billion-pound flotation of Lazard's advisory and asset management businesses later this year. Panmure, which analysts called 'a move outside the box for Lazard', no longer seemed relevant. But by keeping a stake in the enlarged company, Lazard can at least give the impression of not having done a complete volte-face in the space of a year.

[michaeld] 28/1/2005 09:29

Yes, quite.

[adh0] 27/1/2005 14:10

How come T&G can get a bid approach/takeover/whatever and the shares are not suspended but ours are?

[michaeld] 19/1/2005 11:17

Thanks for posting that Adho. I expect that shareholders will get a circular about this soon? There is also potential for a counter bid?

[adh0] 18/1/2005 10:32

From todays FT:

When Marcus Agius announced the acquisition of Panmure Gordon from WestLB one year ago, he promised it would dramatically enhance Lazard's UK business.

The chairman of Lazard in London was worried that his firm was missing opportunities because it was losing out to rivals who were able to use their in-house broking teams to win clients.

Mr Agius's choice of Panmure surprised many in the City.

It seemed to undermine Lazard's much-cherished boast that it was one of the last houses offering advice to companies that was not tainted by any conflicting relationships with institutional investors.

And Panmure seemed distinctly second division: most of its clients, such as Regent Inns and Partridge Fine Arts, are smaller or medium- sized companies.

Privately, even some of Mr Agius's colleagues were doubtful and were comforted by the knowledge that the purchase price, never disclosed, was tiny.

Mr Agius, however, was adamant that any conflicts could be ironed out, that owning a broker was essential and that Panmure was the one to own. Somewhat mysteriously, he has now changed his mind.

Lazard is trying to off-load Panmure by merging the 127-year-old broker with Durlacher, its smaller rival.

In the terms of the deal under discussion, Panmure would launch a reverse takeover of Durlacher to create a combined group with a market valuation of between £60m and £80m.

The new entity, which would have about 100 corporate broking clients with a focus on smaller companies, would then be relisted on the stock market.

Tim Linacre, Panmure's chief executive, and Richard Wyatt, chairman, are both expected to take up similar roles in the new entity.

The two bankers will also be sitting on a valuable amount of equity in Lazard, which filed with US regulators at the end of last year to raise $850m (£455m) in an initial public offering.

Lazard will be left holding 33 per cent of Panmure-Durlacher. One senior Lazard banker says: "We will have favoured-nation status with Panmure."

Lazard insiders staunchly defend their decision to sell Panmure. One corporate financier at the bank says: "There was an element of defensiveness when we bought it. At the time, we needed it. But this new option allows Panmure to gain access to capital and still have close ties with Lazard."

Panmure was never going to be included in the proposed flotation of Lazard. Instead, the broker had been pencilled in to become part of a separate vehicle called LFCM Holdings, which would hold all of Lazard's capital markets operations and its direct investment and fund management activities, excluding those in France. LFCM would remain privately owned by Lazard's working members.

With or without Panmure, Lazard has work to do in London, where it has been languishing low down in the investment banking league tables.

[michaeld] 16/1/2005 10:24

There is an article in todays Sunday Telegraph to the effect that it is Panmure Gordon that is in talks with Durlacher over a merger. Apparently the enlarged group will be one third owned by Lazards, one third by Durlacher shareholders and one third by management. It sounds like quite a good idea but I hope that the proposed new management are going to buy their share stake and not be granted them 'buckshee'?! If it turns out that their stake is being granted to them free or at a very low cost then this Durlacher shareholder will vote against the proposed deal. There is also to be a move to AIM; again for the new management's tax benefits,I would guess?
It is proposed that Tim Linacre, Panmure's Chief Exec and Richard Wyatt, the Chairman will have similar roles at Panmure Durlacher whilst Simon Hirst CE of DUC will become executive Deputy Chairman.