IAN HANNAM’S announcement last week that he is financially backing Heathrow Hub, a scheme to boost the airport’s capacity, was also a reminder to the financial world at large that he is back in business.
Hannam, who left his senior job at JP Morgan after being fined £450,000 by the City regulator for alleged market abuse, a charge he is currently appealing, has largely kept his head down since, emerging only publicly to appear in court in the summer to appeal his punishment. The case has since been adjourned and will resume in a few weeks.
Behind the scenes and away from the legal complexities of his appeal, Hannam has, however, been building up the makings of an old-fashioned merchant bank – Strand partners, which he runs with former JP Morgan colleague Neil Passmore.
Strand currently employs around 30 financiers, many of them formerly of JP Morgan, who specialise in corporate finance.
Hannam himself, a man of relatively modest beginnings, has been advising on at least two of the larger public company transactions of recent times, a £550m rights issue for Ophir Energy and then one for First Group. In both transactions JP Morgan was involved too.
Over the years, Hannam has been involved in some of the City’s largest deals, including Bumi (oh dear), and SAB Miller’s stock market listing.
Life in the City would definitely be duller without him.
BEAR HUGS CAN GO WRONG
Amec’s decision to walk away from making a bid for oil services group Kentz had a pretty devastating effect on the latter’s share price, which dropped by more than nine per cent yesterday to 499p.
Kentz, which was advised by Investec and James Robertson from UBS (one of the bankers yesterday given the go-ahead for the £3bn privatisation of Royal Mail), had never looked likely to get into a position where it felt discussions with Amec were worthwhile. The two groups appeared to differ markedly on valuation.
The walking away from the offer is the second time this year that Amec’s adviser Deutsche has pulled away from a bid situation after going to shareholders in a target company only to find they won’t bite. Earlier this year Deutsche advised a consortium that expressed bid interest in Severn Trent but never followed through.
From a bidder’s point of view, the objective is for its advisory team to approach shareholders with a view to them persuading a company’s management to listen to an offer even though they might not have wanted to. On this occasion, as with Severn Trent in June, the tactic, known as a Bear Hug, failed.