Close Brothers take-over talks collapse following stock market turmoil

Following renewed stock market turbulence, discussions to take-over Close Brothers, the 130-year old UK investment bank, have failed.

Cenkos, the stockbroker, and Landsbanki, Iceland’s second-largest bank, have abandoned their take-over bid after the 3 parties failed to agree on the terms of the deal.

Cenkos hoped to take the asset management and corporate finance businesses as well as Winterflood Securities (Close Brother’s stockbroking arm) while Landsbanki sought the bank’s commercial lending operations.

The two parties made a 950p per share indicative offer for Close Brothers in November last year but were rejected. Earlier this month, their offer was increased to 10.25p per share.

In a statement, Close Brothers said that Cenkos had set a number of pre-conditions to the deal, including limitations on the bank’s ability to solicit rival offers.

Close Brothers refused to agree to the conditions because of its uncertainty over whether Cenkos would be able to acquire the funding for its offer following the turmoil in global stockmarkets.

However, Close Brothers admitted it is still in discussions with other bidders but negotiations are at an early stage and may still breakdown due to the the volatility in the stock markets.

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