DMGT looks ahead as it cuts ties with JP Morgan Caz

David Hellier
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CORPORATE broking relation-ships in the City tend to be pretty sticky, which is one reason bankers tell me that Barclays is so far hanging on to many of its newly-won clients even though the ultimate force behind its move into this line of business, former chief executive Bob Diamond, is very much no longer with the bank.

The Swiss bank UBS also stands proudly at number two in the league table of FTSE 100 clients, with 29 companies choosing it as one of its brokers.

One of the stickiest relationships of all has been that of Daily Mail and General Trust, the media group, and JP Morgan Cazenove – until that was ended, without any fuss, a few weeks ago.

Cazenove, as it then was, has been broker to DMGT for decades, and survived in its advisory role even as it was partnered and then fully bought out by JP Morgan, the US investment bank.

But DMGT, whose other corporate broker is Credit Suisse, has decided to cut its ties on the recommendation of chief executive Martin Morgan.

With 74 per cent of its profits coming from its business to business activities, Jonathan Harmsworth’s Daily Mail and General Trust group is becoming less and less reliant on its national newspapers for its financial growth.

An adviser to the group said yesterday: “With the business moving away from a reliance on newspapers towards business to business activities, it was felt that a fresh set of advisers is the way to go.”

JP Morgan’s rivals, who covet its position as the leading broker to FTSE 100 companies (38 at the latest count), may view the loss as significant and have been heard muttering how Cazenove is in danger of losing the uniqueness that it had before being fully subsumed by JP Morgan.

But JP Morgan insiders say there is no need to panic. The firm has recently won mandates for Croda, Hammerson and G4S and is in no mood to surrender its pole position any time soon.

RBC’s offices near the Thames in the City of London recently hosted pitching meetings for the forthcoming $500m (£310m) money-raising for the oil group Addax & Oryx group.

RBC is likely to lead the forthcoming flotation, with Bank of America Merrill Lynch and Barclays completing the syndicate.

Sadly for London, the group is expected to list in Toronto rather than here, and isn’t even contemplating a dual listing structure despite London’s strengths as a base for natural resources and exploration stocks.

With only four full listing flotations since the beginning of the year, London could have done with part of the action but the management team, which knows Toronto and its investor base well, appears to prefer that jurisdiction.

Group chairman Jean-Claude Gandur netted $1.5bn when he sold Addax Petroleum to China’s Sinopec Group in 2009.

He then returned to oil exploration with Oryx Petroleum in 2010. He has stakes in two fields in Iraq’s Kurdish region, and is vying for more in Africa. He also founded the Fondation Gandur pour l’Art in Geneva’s Musée d’Art et d’Histoire.
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