Lehman muscles in on Cazenove deal

LEHMAN Brothers looks set to attempt to break up a joint-venture deal between Cazenove and JP Morgan Chase as the big international investment banks line up to make offers for London's last major independent stockbroker.

After months of speculation concerning the on-off flotation or sale of Cazenove, Lehmans is understood to have come up with an £800m offer to buy the broker in an attempt to derail the plans of US rival JP Morgan.

Lehmans is believed to have offered £500m upfront with a further £300m dependent on future performance.

The offer is unlikely to impress Caz's chiefs led by chairman David Mayhew.

Not only does the putative JP Morgan deal offer it a degree of future independence, the Lehman offer - an outright takeover proposal - falls short of the £1.1bn price Caz has hung on itself and includes what are believed to be tough performance criteria.

The JP Morgan offer is one of a joint venture in which the Caz's partner-shareholders would receive a payment of about £400m.

With Wall Street picking over what is the City's last major homegrown asset after the massive shake-ups in the Square Mile over the past 20 years, eyes will now be turning to see whether Barclays makes a move on Caz.

One victim of any Cazenove-JP Morgan deal could be relationships in the expected bid battle for Abbey. Spanish raider Banco Santander is advised by JP Morgan while would-be bidder HBOS has Caz among its advisers.