Queen's broker goes up for sale

CAZENOVE, the blue-blooded City institution that is stockbroker to the Queen, has been put up for sale. An information memorandum detailing financial aspects of the 180-year-old firm is being quietly sent to potential suitors, signalling that Cazenove has finally abandoned its long-held ambition to float on the stock market.

The decision will be a blow to Cazenove's pride because it comes just weeks after Greenhill, an investment banking boutique founded only eight years ago, said it was planning a £280m flotation on the New York stock market.

It is believed that Cazenove, which last week confirmed it was advising film studio Pinewood Shepperton on a £100m flotation, has yet to appoint its own external financial advisers, and to date may be handling the situation internally.

Its shares, which are traded only internally, stood at 350p on Friday, which values Cazenove at just over £760m. It is the highest price since dealings started last July. The shares, which are mainly held by staff, traded at 265p in December, valuing the company at £568m.

When the privately owned firm incorporated three years ago in preparation for a flotation, it was valued at £1.2bn with some City bankers predicting that it could reach £2bn.

Chairman David Mayhew, 63, who is advising the board of Standard Life, holds 3.5m shares at present worth £12.4m, while chief executive Robert Pickering, 44, owns 2.6m shares worth £9.2m.

Pickering said in January: 'We always said we are not religious about independence, but it's key to what makes us different.'

Cazenove, which acts as stockbroker to about half the FTSE 100 companies, shelved earlier plans for a stock market float in January 2003, but recently indicated its intention to dust down the blueprint and seek a flotation in the third quarter this year.

It is understood that some Cazenove employees now regret that the institution decided against being taken over in 2000 when it held exploratory talks with leading American investment banks.

Today's valuation is likely to be a fraction of the price Cazenove would have fetched then, but market conditions have wreaked havoc on its performance.

Its financial year ends on April 30 and profit figures are not yet available. But Cazenove, fund manager to David Beckham, suffered a 77% slump in profits to £14m in the year ending April 2003, which Mayhew described as the bank's most difficult for a generation.

Staff claim their profit share for the three months ending September was the worst since 1987.