Cavendish taps top adviser to fend off foreign takeover interest
Cavendish has drafted in advisers from a top corporate consultancy to help it fend off low-ball takeover bids amid a wave of consolidation in Britain’s financial services sector.
Top brass at the boutique investment bank enlisted the help of specialists at Teneo last year, Morning Wire can reveal, who conducted a valuation exercise to “support potential bid defence” during what it describes as “a period of uncertainty”.
The work was carried out to underpin confidence in Cavendish’s position and help support “informed decision-making” ahead of any takeover offers the City broker attracts, the company said in its annual report.
Teneo’s instruction comes after Cavendish, which was formed via the merger of Cenkos Securities and Finncap in 2023, last year rebuffed a bid from S&W for its merger and acquisition (M&A) advisory arm.
Cavendish chair Lisa Gordon said: “It is good practice for the board of any listed company to undertake an independent valuation exercise to ensure it is prepared for any eventuality.”
London’s mid-market investment banking industry has been through a wave of consolidation in recent years after a drop-off in initial public offerings and capital markets activity. Cavendish rivals Panmure Gordon and Liberum merged in 2024 while Numis was bought by Deutsche Bank in 2023.
London’s wider financial services sector has also been swept up in a trend of foreign buyers picking off British competitors at attractively low valuations by international standards.
Earlier this year, investment giant Schroders and FTSE 100 insurer Beazley were bought by foreign rivals in quick succession. Fund managers W1M and Redwheel are also reportedly exploring sales, while Evelyn Partners changed hands for £2.7bn in February, going to Natwest after its private equity owners put it up for sale.
Cavendish has now completed the valuation exercise, a person familiar with the matter told Morning Wire, and is understood to no longer retain the services of Teneo.
Cavendish doubles down on diversification drive
As part of the same report, Cavendish also confirmed plans to diversify away from its core dealmaking divisions in an effort to reduce its reliance on its highly cyclical core investment banking revenue streams.
Blockbuster IPO instructions and big ticket M&A deals have traditionally proved lucrative arms for the City’s investment banks. But a years-long barren run of London market debuts – and the volatile geopolitical environment’s effect on deals sentiment – has forced lenders to become less reliant on a pipeline of big deals to fuel their financial performance.
Several have sought to build out wealth management arms – either organically or through corporate activity – as was the case with Natwest’s Evelyn takeover. Cavendish plans to focus efforts on fleshing out its broking and private markets functions, it said.
The bank’s board added that it viewed the diversification drive as a “key strategic priority” that would help it to “support clients across market cycles”.
Teneo was approached for comment.