One of the City’s oldest stockbrokers is hoping to reach a deal over the coming days to raise vital funds in a bid to stave off administration.
The 130-year-old Seymour Pierce has been hit by a slump in deals in the wake of the financial crisis. Sources said no decisions have been taken yet, and, while they acknowledged that administration is an option, they stressed that the firm was “working hard” on talks to bring in new investment.
It is understood that Grant Thornton could be appointed as administrator if those discussions proved fruitless, but spokespeople for both firms declined to comment.
Seymour Pierce, which traces its name back to 1883, employs 80 people and is best known for advising on the sale of Premier League football clubs, including the 2003 acquisition of Chelsea by Roman Abramovich.
The firm is part-owned by financier Keith Harris, who was a member of the “Red Knights” consortium that launched an unsuccessful bid to buy Manchester United from the Glazer family almost three years ago.
Seymour Pierce once specialised in raising funds for small gas and water utility companies, but broadened its horizons following a spate of consolidation in that sector. It was taken over in 1987 by the Bermuda-based Bank of NT Butterfield & Son, but was sold again in 1996 to Aim-quoted stockbroker Ellis & Partners when Butterfield closed its London operations. Harris led a management buy-out of the firm in 2003, backed by private equity group Alchemy Partners. He is understood to have attempted to sell the company to US firm Gerova Financial two years ago, but the deal fell through. Recent moves to bring in overseas investors were blocked by the Financial Services Authority.
Rival broker Panmure Gordon – which appointed former Seymour Pierce chief executive Phillip Wale as its new boss last year – was also reported to have been approached about the possibility of a cash injection.
According to the latest available accounts, Seymour Pierce Holdings sank to a pre-tax loss of £587,119 in the year to 30 September 2011, compared with a £617,275 profit the previous year, which the firm said was a “reasonable result in the light of the extremely difficult trading conditions encountered during the year”. Turnover dipped 3 per cent to £19.9m.
Recent deals include advising Aim-quoted Bayfield Energy on its reverse takeover by Trinity Exploration and Production, which is chaired by North Sea veteran Bruce Dingwall, the former chief executive of Venture Production.
It also acted as financial adviser to Nottingham Forest Football Club, which was sold to Kuwait’s Al Hasawi family in July following the death of previous owner Nigel Doughty, and was the adviser and sole bookrunner on the flotation of Superdry fashion label owner SuperGroup in 2010.