Thu 21 May 2009
Placing of 67,514,813 new Ordinary Shares at 34 pence to raise £23 million
The Board of Panmure Gordon is delighted to announce that, following a detailed review of all proposals received, the Company has conditionally raised approximately £23 million before expenses in a Placing with QInvest LLC (“Qinvest”) of 67,514,813 new ordinary shares (“Ordinary Shares”) in the Company (the “Placing Shares”) at a price of 34 pence per Ordinary Share (the “Placing”).
Following the Placing, QInvest will own approximately 44% of Panmure Gordon’s enlarged share capital on a fully diluted basis (1).
Strategic investment in Panmure Gordon by QInvest
• QInvest is Qatar’s largest investment bank with US$1 billion of authorised capital and investments in the Middle East, UK, continental Europe and the US.
• Shahzad Shahbaz, CEO of QInvest, spent 25 years with Bank of America where he was, until 2006, based in London as head of regional investment banking for Europe, Middle East, and Africa. Subsequent to this, he was CEO of the Emirates NBD Investment Bank in Dubai.
Placing will significantly enhance Panmure Gordon’s balance sheet
• On a pro-forma basis, the Group will have regulatory assets of approximately £45 million, representing over 3.5 times the regulator’s required minimum.
• The enhanced balance sheet strength will further enable the Group to execute client transactions and to be a counterparty of choice for institutional investors.
QInvest is an outstanding strategic partner that will enhance Panmure Gordon’s business
• The investment by QInvest will give Panmure Gordon the financial strength to grow into new business areas and new geographies.
• Panmure Gordon, through both QInvest and existing shareholder relationships, will have access to significant pools of capital in the Gulf region.
• QInvest and the management of Panmure Gordon believe there is significant opportunity to leverage Panmure Gordon’s brand and reputation to service institutional and corporate clients in the Gulf region.
• QInvest is a long-term investor and highly supportive of Panmure Gordon’s management.
Board strengthened with addition of four new non-executive directors
• Panmure Gordon’s board will be expanded to 10 directors with the addition of four new non-executive directors to be nominated by QInvest.
• The proposed four new directors comprise highly experienced global investment banking, wealth management and hedge fund professionals, with specific expertise in building successful financial services businesses.
Tony Caplin, Chairman of the Board, said:
“With our independent advisers, the Board applied a formal process to review rigorously the proposals put forward by parties interested in investing in the Company. We wish to put on record our appreciation of all the parties for their interest in the Company and their clear desire to see the firm grow and prosper. BlueGem and SPQR Capital are outstanding firms and on behalf of the Board, I thank them for their conduct and adherence to the spirit of the process. We very much hope that we can work with them in the future.
“Following the detailed review and after consultation with major shareholders, I am pleased to announce that the Board has selected the proposal put forward by QInvest on the basis of their shared vision for the Company’s future, the exceptional contacts they provide in the Middle East and their outstanding potential to drive new revenues through Panmure Gordon for the benefit of all the firm’s stakeholders.
“We are pleased that QInvest recognised the firm’s substantial value, demonstrated by it proposing the highest subscription price. QInvest is deeply supportive of the firm’s management and I look forward to welcoming the new non-executive directors to the Board.
“Following the Placing, Panmure Gordon will have a robust balance sheet and, through QInvest’s unique contacts and expertise, every opportunity to achieve strong growth in the coming years.”
Shahzad Shahbaz, Chief Executive Officer of QInvest, said:
“Our investment reflects the strength of our desire to work with the Board and Tim Linacre over the coming years. We see the firm continuing to provide outstanding service to clients as it builds on its strengths as a leading independent corporate stockbroker and investment bank in the UK and as a leading growth-focused investment bank in the US. Allied to QInvest’s Middle East capabilities, investment management and investment banking expertise, we are confident of leveraging the Company’s platform to create outstanding shareholder value.”
A circular will be posted to shareholders shortly.
Advisers to Panmure Gordon: ING Corporate Finance as corporate finance adviser; Berwin Leighton Paisner LLP as legal adviser; and Financial Dynamics as communications adviser.
Advisers to QInvest: Qinvest Investment Banking and PricewaterhouseCoopers as joint corporate finance advisers, Lovells (Middle East) LLP as legal adviser and Hill & Knowlton as communications adviser.
Panmure Gordon & Co plc
Tim Linacre, Chief Executive: +44 (0)20 7459 3600
Ed Gascoigne-Pees and Billy Clegg, Financial Dynamics: +44 (0)20 7269 7132
Nathaniel Webb, Group Communications Manager: +44 (0)20 7614 8333
Mark Garrood and William Marle, ING Corporate Finance: +44 (0)20 7767 1000
Shahzad Shahbaz, Chief Executive officer: +974 424 6583
Stephen Davie, Hill & Knowlton: +973 3941 8426
Steve Cater and Andrew Perkin, PricewaterhouseCoopers: +44 (0)20 7583 5000
PROPOSED PLACING OF 67,514,813 NEW ORDINARY SHARES AT 34 PENCE PER SHARE TO RAISE APPROXIMATELY £23.0 MILLION
The Company announces that it has entered into a conditional subscription agreement with QInvest to raise approximately £23.0 million before expenses by the issue of 67,514,813 new Ordinary Shares (the “Placing Shares”). The Placing Shares are being issued at 34 pence per Ordinary Share. The proposed Placing is conditional, inter alia, on shareholder approval of certain matters relating to the Placing (the “Proposals”). A circular including, inter alia, a notice of a general meeting (the “General Meeting”) at which the Company’s shareholders will be asked to approve the Proposals will be posted to shareholders shortly.
2. Effect on the Company of the Placing
The Placing will significantly strengthen the Company’s balance sheet. On a pro-forma basis, taking the regulatory assets of the Group as at 30 April 2009 (£23.9 million) and adjusting for the net proceeds of the Placing, the Group will have regulatory assets of approximately £45 million, representing over 3.5 times the regulator’s required minimum. In the opinion of the Directors this will place the Group in a strong position to withstand further market turbulence, provide the Group with further strength to execute transactions on behalf of clients and to be a counterparty of choice to institutional investors.
On completion of the Placing, Shahzad Shahbaz, Rommie Bhutani, Asar Mashkoor and Nader Shenouda (whose details are set out below) will join the Board.
Shahzad Shahbaz (49), Chief Executive Officer, QInvest
• Shahzad is a UK national with close to 30 years banking experience, including 13 years in London with Bank of America, at first heading up the Emerging Markets business, and then as head of the regional investment banking platform for Europe, the Middle East and Africa.
• Shahzad spent 2 years as CEO of Emirates NBD Investment Bank, successfully setting up and building a regional investment banking, asset management and private equity business with approximately 100 employees.
• Shahzad holds a BA in Economics from Oberlin College, Ohio USA.
Rommie Bhutani (40), Co-Head of Principal Investments, QInvest
• Rommie has accumulated more than 18 years of hedge fund, investment banking and finance experience. Prior to joining QInvest, Rommie co-founded and served as CIO of the Brevan Howard India Special Opportunities Fund.
• Rommie previously founded and served as Co-Head and Managing Director of the leveraged finance and sponsor coverage businesses at Bank of America for Europe, the Middle East and Africa, and served on various committees including the EMEA Global Markets Management Committee.
• Rommie holds an MBA from the Schulich School of Business at York University in Canada and is a Chartered Accountant with the Canadian Institute of Chartered Accountants.
Asar Mashkoor (36), Head of Financing & Advisory, QInvest
• Asar has more than 16 years of investment banking and finance experience, including 7 years at Merrill Lynch in London.
• Asar joined QInvest from Emirates NBD Investment Bank where he was Co-Head of Capital Markets, Structured Finance and Advisory.
• Asar is a UK national and a qualified Chartered Accountant (ICAEW). He also holds an Honours degree in Information Systems Engineering from Imperial College (University of London).
Nader Shenouda (43), Head of Placement & Distribution, QInvest
• Nader has accumulated 18 years of client relationship management experience in the MENA region, joining QInvest from Coutts & Co in the UK, where he was Executive Vice President based in London and led the Middle East Wealth Management team.
• Prior to joining Coutts, Nader was a Financial Consultant with Merrill Lynch International based in London where he focused on Ultra High Net Worth families, family offices and institutional clients in the Middle East.
• Nader holds a Bachelor of Science in Mechanical Engineering from the American University in Cairo and studied Investment Management at London Business School.
3. Principal Terms of the Placing with QInvest
The Company and QInvest have entered into a subscription agreement (the “Subscription Agreement”) under which QInvest has agreed to subscribe for 67,514,813 of the Placing Shares at a price of 34 pence per share subject to the satisfaction of the following conditions:
i. the approval of the Proposals at the General Meeting;
ii. admission of the Placing Shares to trading on AIM;
iii. approval from the Panel on Takeovers and Mergers of a waiver of Rule 9.1 of the City Code on Takeovers and Mergers;
iv. approval from the Financial Services Authority; and
v. deemed approval from the United States Financial Industry Regulatory Authority
occurring, in each case, on or before the later of (a) 01 September 2009 and (b) such later date as is agreed by the parties.
The Company and QInvest have also entered into a relationship agreement. This agreement is conditional upon completion of the Placing. Under the terms of the relationship agreement, QInvest has given certain undertakings to ensure, inter alia, that the Company is able, at all times, to carry on its business independently of QInvest and that all agreements and arrangements entered into between the Company and QInvest are on arm’s length terms.
The Company and QInvest have also entered into an agreement pursuant to which QInvest has undertaken to the Company that it will not, for a period of 12 months commencing on the completion of the Subscription Agreement, deal (except in certain permitted circumstances) in the Ordinary Shares to be issued to it pursuant to the Placing and will not, for a further period of 12 months, deal in such shares other than through the Company’s broker from time to time.