Finance News: Cazenove sets out flotation stall

Cazenove, one of the top five charity fund managers, has not ruled out overtures from potential merger partners, despite maintaining a preference for a stock market flotation.

In a statement designed to quash press speculation that it was in talks about a potential sale to US giant Lehman Brothers, the company set out its position.

It said that, after the long bear market - which forced it to shelve a planned initial public offering 18 months ago - it had shored up its corporate advisory, equities and asset management operations.

The company added that results for the year ended 30 April 2004, due in early July, will show that "significant progress has been made, enabling the group to capitalise on the improved market conditions since last summer".

The statement added: "There has been successful recruitment at all levels, and the financial position of the firm is strong. Nevertheless, flotation remains the principal desired method of achieving liquidity for shareholders."

However, Cazenove chairman David Mayhew said the company would not be able to rule out the possibility of a merger. "We are entirely confident that we can continue to thrive as an independent business but, as a PLC with external shareholders, we have a responsibility to consider other options," he said.

Paul Palmer, professor of voluntary sector management at City University's Charity Effectiveness Business School, said that trustees should keep a "very close eye on what's going on". He added: "Trustees need to have a heightened level of scrutiny."

Palmer warned that, during mergers and flotations, fund managers or asset managers often "come and go".

Cazenove, which claims to have more than 500 charity clients on its books, offers strategic allocation advice to charities interested in investing in the financial markets.

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