September 18, 2018 / 12:36 PM / in a month

Peel Hunt stalked by Santander

LONDON, Sept 18 (IFR) - Peel Hunt has denied it is up for sale after a news report said the UK mid-cap equities house had held very preliminary talks with Santander about a possible approach from the Spanish bank.

“We do not comment on press speculation, however I can confirm that Peel Hunt is categorically not up for sale,” said chief executive Steven Fine.

The Sky News report said that any deal would likely be for less than £100m. The firm was bought out from Belgian bank KBC by management and individual investors led by insurer Neil Utley in 2010 for £74m.

Last year Peel Hunt was the second most active firm in UK equity capital markets, working on 32 issues giving it US$1.36bn of league table credit, according to Thomson Reuters data. Numis led the table.

So far this year the firm has dropped one place to third behind Numis and Barclays. It has acted on 16 deals with league table credit of US$804m. By total proceeds it has dropped five places to 15th.

Its largest transaction was the £162.5m IPO of financial adviser IntegraFin in February, for which Peel Hunt was sole bookrunner.

By contrast Santander has only worked on one UK ECM deal this year: May’s £700m rights issue by support services group Capita, on which it was one of four underwriters.

Santander declined to comment.

Further consolidation has long been anticipated among UK mid-cap equities houses, particularly in the wake of MiFID II rules, in place since January, which force brokers to split the cost of equity research from trading.

Rival equity house Cenkos said on Tuesday its first-half revenues dropped 38% to £29.2m.

Last year Cenkos, alongside Barclays and finnCap, was the joint-third most active UK ECM house, working on 25 issues earning league table credit of US$1.51bn. So far this year it has dropped five places to eighth, giving it US$404m of league table credit from 12 deals.

“The 2017 first-half results benefited from revenues of £10.6m from a single client transaction whilst in 2018 the highest value transaction was £2.4m. This difference accounted for much of the shortfall,” said chief executive Anthony Hotson.

The last major purchase by an Iberian bank of a UK equities house was in 2010 when Banco Espirito Santo bought Execution Noble for an undisclosed sum. (Reporting by Christopher Spink)

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