PMR.L Regulatory News (PMR)

1 Feb 2005 07:36

Durlacher Corporation PLC01 February 2005 PRESS ANNOUNCEMENTFOR IMMEDIATE RELEASE 1 February 2005 Durlacher Corporation Plc ("Durlacher" or the "Company")Proposed Acquisition The Board of Durlacher announces that it is in exclusive negotiations and hassigned a Memorandum of Understanding with Lazard & Co., Limited ("Lazard") tocombine the businesses of Panmure Gordon and Durlacher by way of the acquisitionfor shares by Durlacher of the Panmure Gordon business (the "Acquisition"). TheAcquisition will create a leading institutional and corporate broker providing abroad range of securities services for Official List and AIM companies andinvestors. Panmure Gordon, a division of Lazard, is a leading institutional and corporatebroker in the UK market providing a full range of broking services. PanmureGordon has a well known and respected brand built through its focus on the valueof long-term client relationships. Currently it advises approximately 55corporate clients and researches and makes markets in over 400 quoted UKcompanies and investment trusts. As a division of Lazard, Panmure Gordoncurrently has just over 100 employees, all based in London. Durlacher is a UK investment bank focused on the small and mid cap sector.Durlacher provides corporate broking, corporate finance, equity research, equitysales and market-making services, primarily to AIM-quoted companies. Durlachercurrently acts as broker or adviser to approximately 45 quoted companies,researches approximately 75 quoted companies and makes markets in approximately90 securities. Durlacher has 62 employees, almost all of whom are based inLondon. The Board of Durlacher and management of Panmure Gordon see this combination asan opportunity to create a leading independent quoted UK securities businesswith clients across the market capitalisation spectrum. They believe that thecombined business will: • be approximately three times the size of the existing Durlacher business; • have the strong brand and valued long-term client relationships of Panmure Gordon; • benefit from Durlacher's expertise in the fast-growing AIM market; • have approximately 100 corporate clients ranging from FTSE 100 to AIM quoted companies, with research also covering this broad spectrum of market capitalisations; and • provide research and market making services in approximately 500 UK securities and investment trusts. The combined business has the potential to create significant value forshareholders through: • complementary and incremental revenue streams; • its ability to grow revenues by: - attracting new brokership clients; - the continued expansion of its AIM business; and - the continued expansion of its institutional equity business; • a good balance between corporate and institutional equity activity; • attractive cost synergies, including synergies through the location of the combined business predominantly within Durlacher's existing office location; and • alignment and focus created by a high level of internal ownership. It is expected that following the Acquisition, Durlacher will change its name toPanmure Gordon & Co. plc, although the Company will, where appropriate, serviceits AIM corporate broking clients under the name of "Panmure Gordon Durlacher". Following completion of the Acquisition, it is expected that the Board ofPanmure Gordon & Co. plc will comprise:Executive Chairman, Richard Wyatt - currently Chairman of Panmure Gordon;Executive Vice Chairman, Simon Hirst - currently Chief Executive of Durlacher;Chief Executive, Tim Linacre - currently Chief Executive of Panmure Gordon;Executive Director, Julian Hirst - currently Head of Corporate Finance atDurlacher;Finance Director, David Liddell - currently Finance Director of Durlacher;Senior Non-executive Director, Howard Flight - currently a Non-executiveDirector of Durlacher;Non-executive Director, Tony Caplin - currently Non-executive Chairman ofDurlacher; anda further Non-executive Director, to be appointed by Lazard. Jack Wigglesworth, currently a Non-executive Director of Durlacher, hasindicated that he intends to step down from the Board of Durlacher following theAcquisition. The Board of Durlacher thanks Jack for his contribution to therestructuring of Durlacher. Non-binding heads of terms have been agreed in the form of a Memorandum ofUnderstanding between Durlacher and Lazard and have been approved by theirrespective Boards. The Board of Durlacher expects to be in a position to signdefinitive contracts and publish shareholder documentation setting out thedetailed terms of the Acquisition in March 2005. The consideration for the Acquisition is expected to comprise new ordinaryshares in Durlacher. Following completion of the Acquisition the Company's enlarged issued sharecapital will be held: • approximately one-third by existing Durlacher shareholders; • approximately one-third by Lazard. Lazard's shareholding in Panmure Gordon & Co. plc is viewed as a long-term commitment and it expects to enter into a lock-up arrangement. It is envisaged that approximately half of Lazard's shareholding will be in the form of non-voting shares that will convert into voting shares on, inter alia, sale or transfer to a third party; and • approximately one-third by the employees of the company - this will be made available to an employee benefit trust for the benefit of employees of the enlarged group. Lazard believes that the combination of Panmure Gordon and Durlacher will createone of the leading UK quoted FTSE 100 to AIM corporate and institutionalsecurities firms. Lazard will agree a protocol with the enlarged group dealingwith mutual business referrals and joint marketing going forwards. The Acquisition remains subject to, inter alia, the agreement and execution offinal legally-binding documentation, regulatory approval and Durlachershareholder approval. It is intended that a circular seeking, inter alia,Durlacher shareholder approval of the Acquisition will be posted to Durlachershareholders when further detailed terms of the Acquisition are announced inMarch 2005. The Board of Durlacher expects that the suspension from trading onthe Official List of Durlacher's ordinary shares will cease following posting ofthis circular. It is intended that, following Durlacher shareholder approval ofthe Acquisition, Durlacher's ordinary shares will be de-listed from the mainmarket and admitted to AIM, at which point the Acquisition will becomeeffective. Simon Hirst, Chief Executive of Durlacher and Tim Linacre, Chief Executive ofPanmure Gordon, commented: "The Board of Durlacher and the management of Panmure Gordon both see thiscombination as an opportunity to create significant value through the creationof a leading UK securities business providing a broad range of services forOfficial List and AIM companies. We are very excited at the prospects for thecombined business." Marcus Agius, Chairman of Lazard in London, commented: "As part of Lazard, Panmure Gordon has made significant progress on a number offronts over the past 12 months. The firm has recruited a number of high-qualitystaff and its market share and institutional income have risen. We and thePanmure Gordon management team believe that this transaction offers a greatopportunity to develop and strengthen the Panmure Gordon business, whilstmaintaining a close and productive relationship with Lazard." Durlacher Corporation Plc Tel: 020 7459 3600Simon Hirst Panmure Gordon Tel: 020 7187 2000Richard WyattTim Linacre Lazard & Co., Limited Tel: 020 7187 2000Jon HackRichard Creswell Hawkpoint Partners Limited Tel: 020 7665 4500(Financial Advisers to Durlacher)Ben MingayGraham Paton Bell Pottinger Corporate & Financial Tel: 020 7861 3232(Public Relations Advisers to Durlacher)David Rydell This announcement, for which the directors of Durlacher Corporation Plc areresponsible, has been issued by Durlacher Corporation Plc and has been approvedsolely for the purposes of Section 21 of the Financial Services and Markets Act2000 by Hawkpoint Partners Limited. This announcement should not be forwarded or transmitted in or into the UnitedStates, Canada, Australia, Japan or the Republic of Ireland or into any otherjurisdiction if to do so would constitute a violation of the relevant laws insuch other jurisdiction. Hawkpoint Partners Limited, which is authorised and regulated in the UnitedKingdom by the Financial Services Authority, is acting exclusively for DurlacherCorporation Plc and for no one else in connection with this matter. HawkpointPartners Limited will not be responsible to anyone other than DurlacherCorporation Plc for providing the protections afforded to the customers ofHawkpoint Partners Limited, nor for providing advice in relation to the contentsof this announcement or any matter referred to herein. This press release contains forward-looking statements. Statements that arehistorical or current facts, including statements about beliefs andexpectations, are forward-looking statements. These forward-looking statementsare subject to risks and uncertainties relating to the proposed separation andacquisition of the Panmure Gordon business, including the impact of the proposedseparation and acquisition on the enlarged group's results of operations, thefinancial accounting consequences of the proposed transaction, the impact of theacquisition on the enlarged group's share price and on its relationships withits customers and employees, the tax consequences of the transactions, changesin business climate or market conditions or other factors which could make theproposed separation or acquisition unadvisable. These forward-looking statementsinvolve other inherent risks and uncertainties, and other important factorscould cause actual results to differ materially from those anticipated.Forward-looking statements speak only as of the date that they are made andLazard undertakes no obligation to update them in the light of new informationor future events. This information is provided by RNS The company news service from the London Stock Exchange