Indian duo mull Brewin Dolphin as takeover target

STOCKBROKER Brewin Dolphin yesterday found itself the subject of intense speculation around a potential takeover offer from Indian billionaires the Hinduja Brothers.

The Hinduja Group refused to comment on the rumours, though it is known to have cash at hand for acquisitions in Europe. Just last month, the group agreed a €1.35bn (£1.11bn) deal to buy KBL European Private Bankers from its parent KBC.

Analysts yesterday jumped on the news, with Numis Securities predicting that any deal would have to be on a friendly basis to be successful.

Numis suggested that the minimum price Brewin’s management would accept would be 260p a share, valuing the company at around £600m. However, such a price would mean the firm would be trading at close to 20 times earnings, a much higher valuation than its peers.

“Accounting changes/issues, unexpected dilutive placing, unexpected increases to cost base and growing differences between operating profit and operating cash flows make the company’s earnings lower quality compared to many in our view,” Numis added.

Brewin Dolphin, which closed up 0.4 per cent at 120p, said it is not aware of interest from the Hindujas.