Cater Allen cash call will pay for two Tyndall banks: Purchase will double retail deposits of discount house to pounds 700m
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Your support makes all the difference.CATER ALLEN, the City's biggest discount house, is buying two niche banks from Jupiter Tyndall, the fund manager, for pounds 23m cash, which doubles Cater's retail deposits to nearly pounds 700m.
The deal will leave Jupiter with pounds 30m cash. It plans to buy a pension fund management company with funds under management of up to pounds 1bn.
Cater Allen is paying for Tyndall Bank, based in Bristol, and Tyndall Bank International in the Isle of Man with a one-for- three rights issue priced at a 13.5p discount that will raise pounds 32.3m after expenses.
The balance of pounds 9.3m will help Cater Allen to buy a Jersey trust company.
The Tyndall banks will join Cater Allen's existing banking divisions in London and Jersey to create a new retail bank that will specialise in paying high levels of interest to private and corporate deposit account customers. It will not lend money.
The rest of the rights proceeds will fund Cater Allen's stock lending business, which contributed to pre-tax profits of pounds 17.1m for the year to 30 April 1994, down slightly from pounds 18.9m last time. The shares, after a brief 3p rise, ended the day unchanged at 518p, despite the rights.
David White, managing director, said that while he was disappointed the group's Lloyd's agencies business lost pounds 1.8m last year, slightly down from a pounds 1.89m loss the year before, he expected a return to profit this year or next.
When Jupiter bought the Tyndall banks with its investment management operations in 1991, the company came under the supervision of the Bank of England - a state that the market perceived as making Jupiter relatively bid-proof. This protection is now lost with the sale.
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