Cavendish’s shares surged on Tuesday as the investment bank confirmed it had turned down a takeover bid for its deals unit, following interest backed by private equity.
The London-listed bank was approached by Smith and Williamson (S&W) regarding a deal that would split up Cavendish, although the value of the offer remains undisclosed, according to Sky News, as reported by City AM.
However, Cavendish quashed rumours on Tuesday morning, informing the markets that it had received and rejected interest in its deals unit. Following this news, shares soared 15 per cent mid-morning, reaching 12.88 and nearing last July’s high of 14.30.
The financial services firm stated there have been no further discussions on the matter.
Cavendish swung back to profit in November
Cavendish, which was formed from a £43m merger between Finncap and Cenkos Securities in 2023, returned to profit in November.
This followed a 42 per cent year-on-year increase in revenue to £27.7m. Profits hit £1.8m for the six months to September 30, compared to a £3.6m loss for the same period the previous year.
On Tuesday, Cavendish said: “The group’s strategy is to focus on growing and evolving as a full service, fully integrated, small and mid-cap investment bank with the potential for adding additional business offerings rather than reducing them,” They added: “Cavendish has already generated significant revenues and won a number of live mandates as a result of the integrated business offerings within the Group.”
The group has been outspoken about Budget-related uncertainty following Chancellor Rachel Reeves’ Autumn tax increases.
In November, the company stated that Reeves’ decision to only partially abolish the inheritance tax break on AIM shares “recognises the vital role played by this market in the UK’s economic growth and removes any uncertainty about its future.”
Julian Morse and John Farrugia, co-chief executives of Cavendish, commented at the time: “Our profitable first half, in both public and private markets, demonstrates the broad appeal of our service offering and the efficiency of our platform. We have a solid pipeline of both public and private transactions in progress including a number of potential IPOs.”
