Deal 'a merger not a rescue' says Noble boss

Published on Friday 18 December 2009 21:25

BEN Thomson, the chairman of Edinburgh investment bank Noble Group, yesterday hailed the terms of the deal with London-based brokerage firm Execution as "a proper merger" and not a rescue for the recession-hit Scottish firm.

Although he admitted Noble had faced problems with its capital earlier in the year, it raised sufficient cash from investors and shareholders to meet the "rough" economic climate.

"We didn't have to do this deal but we have done it because we think it makes some strategic sense," said Thomson.

The combined group will be headquartered in London but will retain its Edinburgh offices.

A board member of the government's Financial Advisory Board (FISAB), whose role is to promote financial services in Scotland, Thomson said he would have preferred merging with a Scottish broker – but there wasn't one with sufficient global and large company connections in Scotland to do the deal.

"The problem is there aren't any independent institutional brokers in Scotland," said Thomson.

"I would have loved to have gone with someone in Scotland who was like that but the best in Europe and one of the largest which is independent is Execution."

Thomson confirmed that John Llewellyn-Lloyd, Noble's chief executive of investment banking, and Nick Paulson Ellis, Noble's head of equities, retained senior management roles in the merged group, albeit not on the main board of the new company, Execution Noble.

"Nick and John are still very much part of the management team.

"They would see their roles as having expanded in the wider organisation."

Prior to the merger with Execution, Thomson also confirmed that Noble sold off two "non-core" parts of the business – its equities fund management arm and its fund services business – to employees.

Henry Chaplin, the chair of Noble's investment committee and a main board director, bought out Noble Corporate Management last month and will be leaving Noble at the end of the year.

Noble also sold Noble Fund Managers to Paul Jordan.

Thomson said there was little overlap between the broker, Execution, and roles in the investment bank and as a result there would be "little if any" duplication of jobs.

"You could not have got a firm where there is a more neat fit of top management," he said.

"We are going from 100 and they have 150."

He insisted the enlarged company would be a "new force in international investment banking" and would be good for Scottish financial services.

"I am incredibly pleased about what we have done."

He concluded: "It gives us something we can be proud of in Scotland, that it is still an independent company and a large percentage of it is management shareholders are Scottish."