Financial News

  • 4 February 2013, 8:43

Seymour Pierce On Verge Of Administration

The stockbroker Seymour Pierce, one of the industry's most prominent names, is poised to call in administrators after falling victim to a collapse in fundraising and trading activity across the City.

I have learned that the board of Seymour Pierce's holding company is likely to appoint administrators as soon as tomorrow after discussions with a number of rivals and private equity groups about a capital injection failed to come off.

Grant Thornton is understood to have been lined up as the potential administrator.

People familiar with the situation said that administration might yet be averted if Seymour Pierce could find a cash injection of around £3m in the near future.

The broker's board is understood to be meeting this afternoon to examine options for its future.

The firm is understood to have had an unidentified investor from Eastern Europe lined up for some time. One person close to Seymour Pierce said the City regulator, the Financial Services Authority, had raised concerns about the identity of the backer.

If Seymour Pierce's board  does opt for the administration route, it potentially threatens the future of the firm, whose holding company is chaired by Keith Harris, the financier best-known for his role in arranging a string of football club takeovers.

Mr Harris was also a member of the 'Red Knights' consortium of City heavyweights which examined a potential takeover bid for Manchester United in 2010.

Seymour Pierce, which traces its name back to 1883, has struggled in recent years to withstand a downturn in client activity against a dire economic backdrop. Poor trading has prompted a wave of consolidation, including takeovers of firms such as Collins Stewart and Evolution.

If Seymour Pierce does go into administration, it would place a question mark over scores of City jobs.

Just over two years ago Mr Harris led an effort to sell the company to Gerova Financial, a US-based company, but the deal fell through amid doubts about its structure.

The broking firm itself is chaired by Derek Zissman, a former KPMG accountant. It recently appointed Tom Forcier as its chief executive after his predecessor, Phillip Wale, defected to rival firm Panmure Gordon. Mr Harris has not sat on the broking firm's board for approximately 18 months.

In the early 20th century, Seymour Pierce specialised in raising money for gas and water utilities, a role which changed after the nationalisation of the gas industry in the aftermath of the Second World War.

The firm was taken over in 1987 by the Bermuda-headquartered Bank of NT Butterfield & Son, only to be sold again nine years later to Ellis & Partners, a company listed on the junior AIM market.

In July 2003 a management buyout team headed by Mr Harris acquired the broker with the backing of investment firm Alchemy Partners, returning it to its core focus advising clients on the UK markets.

Seymour Pierce's most recent annual accounts filed at Companies House show that the company made a pre-tax loss of nearly £600,000 in the year to September 2011.

A Seymour Pierce spokesman declined to comment on a possible decision to call in administrators.

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