Evolution raids its £100m kitty for buyback

EVOLUTION, the quoted stockbroker that brought Regal Petroleum to the stock market, has bought back a key parcel of its own shares held by Germany's Commerzbank for £12m.

The deal comes just a day before Evolution is set to be axed from the FTSE 250. With its shares just above an 18-month low 127¼p, it is valued at less than £300m against £432m in March.

Around one-third of that value - £100m - represents net cash on the balance sheet.

Late yesterday, a large overhang of stock totalling 9.7m shares, or 4%, went through the market at 122¾p.

The likely seller was Commerzbank, which acquired the original stake through its nowdefunct proprietary trading desk.

Evolution mopped up most of the shares itself as part of its buyback programme, dipping into its cash pile to pick up 6.5m at 123¾p. The rest were bought by its employee share trust.

The share price has mainly been depressed by the company's involvement in Regal, whose own shares crashed within weeks of a £45m share placing handled by Evolution at the end of April.

Evolution shares have fallen more than 20% since then and it is almost certain to drop out of the FTSE 250 index in tomorrow's quarterly reshuffle.