Indian conglomerate Tatas are now reportedly looking at a potential bid for a British investment bank that was once its advisor.
LONDON: After taking over steel giant Corus and emerging as a front-runner for iconic car brands Jaguar and Land Rover in the UK, Indian conglomerate Tatas are now reportedly looking at a potential bid for a British investment bank that was once its advisor.
According to media reports here, Tata group is among the potential suitors for over 100-year old British investment banking firm Close Brothers.
Without naming its potential bidders, Close Brothers said in a regulatory filing here that it has been approached by many parties.
Incidentally, Close Brothers was Tata group's advisor in its 53.4 million cash offer for INCAT International Plc in 2005. This was the first public offer for a UK firm by an Indian bidder and was the largest Indian acquisition into the European software and IT services space till that time.
"The Board of Close Brothers announces that following the indicative offer from Cenkos on November 7, it has received a number of further approaches. The discussions with interested parties are at an early stage and there can be no certainty that they will lead to an offer," Close Brothers said in its filing.
Tatas are among various potential bidders such as private equity giant Blackstone and Japanese financial group Orix, according to media reports here.
Tatas are already looking to buy out US carmaker Ford's British luxury brands Jaguar and Land Rover and had successfully completed their 11 billion dollar acquisition of Anglo-Dutch steelmaker Corus earlier this year.
Founded by William Brooks Close, the services of Close Brothers include investment funds, wealth management, securities trading, corporate finance advice and lending. The investment bank was listed at the LSE in 1984.
However, the merchant bank's fortunes have taken a beating in the stock market, with shares declining as much as 30 per cent this year.
Financial Times termed the emergence of Tata and Orix as potential bidders as a surprise, adding that "the group, which still styles itself "a merchant bank", has a long history and a conservative reputation."
"Romantics might even see a Japanese or Indian solution as consonant with the pioneering spirit of "WB" - the bank's founder, William Brooks Close, who built the firm on a combination of Iowan farm mortgages, Alaskan railway financing and personal contacts with England's great and good," the report noted.
A month earlier, Close Brothers had rejected a bid of 950 pence a share, totalling 1.4 billion pounds in cash, from its rival Cenkos and Iceland's Landsbanki. There were also reports naming investment banker Lehman Brothers and Collins Stewart of Cenkos among the new bidders.
"The bank (Close Brothers), which is still considering several possibilities for its future, is now understood to be leaning towards a sale of the whole company. Discussions are less advanced with Tata, which has a financial arm but no history of interest in investment banking," the Financial Times reported over the weekend.
Another report in the Daily Telegraph said Blackstone is also understood to be among the potential bidders.
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