Singer likes sound of Icelandic bid

BANKING and fund management group Singer & Friedlander has recommended a £547m cash bid from its biggest shareholder, Iceland's Kaupthing Bank.

The takeover of one of the City's last remaining independent investment banks could trigger a wave of consolidation in the sector after Kaupthing executive chairman Sigurdur Einarsson confirmed that he was looking to buy a UK broking business.

He said: 'We have broking in the US and the Nordic countries but not the UK. We have not decided yet if we will be hiring - but buying a business is most likely. We are open to acquisitions if the price is right and the fit is right.'

Kaupthing's plans to use the S&F buy as a springboard for building up a 'universal bank' for mid-sized companies would in effect be a reconstruction of the old Singer & Friedlander business, which over the past decade sold off its broking and mergers and acquisitions advisory business.

Kaupthing is cash-rich after a surge in income from its bank lending and its London-based corporate advisory business. First-quarter pre-tax profits were a record 14.3bn kronur (£118m) against 3.5bn kronur a year ago.

Today's 316p-a-share offer for S&F is 33% higher than the price 14 months ago when Kaupthing upped its stake from 8.3% to 19.5%. Singer chief executive Tony Shearer stays on after the deal is completed, along with executive directors Jonathan Spence and Warwick Jones.

Singer shareholders collect a final dividend of 4.25p.