RTZ poised to drop Hoare Govett
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Your support makes all the difference.HOARE GOVETT, the stockbroker taken over by the Dutch bank ABN Amro earlier this year, is to lose one of its largest corporate clients, RTZ Corporation.
The loss will be a blow to Hoare's corporate finance department, which has lost nearly 20 clients and half a dozen of its top people since ABN Amro took control of the broker.
Most of the departing clients have been smaller companies, many of which were unsettled by the sacking of the smaller companies team, led by Shaun Allison, which Hoare then attempted to rehire.
RTZ, the mineral and mining group, has appointed Cazenove as joint broker in addition to its existing advisers, Barclays de Zoete Wedd and Hoare.
A source at RTZ said: 'Of course it is silly to have three brokers. Cazenove is a replacement for Hoare, but the company is hoping to let them go quietly.'
RTZ would not confirm this officially last week. Margaret Bull, RTZ's head of investor relations, said she would not comment on the group's stockbroking relationships. Investors would be informed of any changes.
ABN Amro purchased Hoare, which has around pounds 50m of accumulated tax losses, from Security Pacific for what is believed to have been the knock-down price of pounds 25m. The deal was expected to bring securities to the broker, which had been on sale for nearly two years and was close to completing a management buyout when the merger of SecPac with Bank of America put the deal on ice.
Peter Meinertzhagen, Hoare's chairman, said at the time of ABN Amro's takeover that he hoped that Hoare, as an independent broker, would be able to tempt new clients from integrated houses such as SG Warburg and Kleinwort Benson, where companies were worried about conflicts of interest.
But after the takeover Hoare announced 35 redundancies and a team of its top corporate finance staff, led by Richard Paine, left to join Panmure Gordon. Mr Paine and his team have tempted more than a dozen clients from Hoare, including Henlys Group, which used Panmure to help it defend a bid from T Cowie.
Estimates from rivals are that Hoare's corporate client list has shrunk from around 94 companies to about 75, with more expected to leave. Its client list is now believed to be smaller than that of Smith New Court, which had no corporate clients five years ago.
'Companies only tend to change brokers if they are doing something,' a stockbroker said. 'If they are not issuing shares, they tend to leave things as they are.'
(Photograph omitted)
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