Mystery firm makes move on Evolution

BANK and broker Evolution Group admitted yesterday it had received an early-stage takeover approach from an unidentified potential bidder.

The surprise announcement sparked feverish speculation as to the likely bidder and why they targeted Evolution, which had not previously been seen as for sale. Evolution’s shares closed 8.5 per cent higher.

Brokers are witnessing a wave of consolidation as they cope with a new business drought caused by low appetite for deals in volatile markets.

Its broking arm, Evolution Securities, expects to make no profit this year and its most recent half-year results showed operating profit fell 28 per cent as income per client-facing employee sank by a fifth.

Analysts pointed to an international banking group keen to build a London footprint. “They have guided to zero profits for this year in the context of weak markets and over capacity. It is hard to see a bidder for this business unless it is a new entrant such as a foreign bank seeking a foothold in London,” said Keith Baird of Oriel Securities.

“There is generally consolidation taking place in the industry and Evolution is priced quite cheaply so there was always the potential that this could happen,” said Peel Hunt analyst Henry Biddle.

Evolution’s wealth manager Williams de Broë is however growing fast and in late stage talks to buy a private client business from BNP Paribas.