The Great Debate UK
As your friendly neighbourhood investment bank rarely tells you, something like 80 percent of deals don't pay off. So why do one if you don't have to?
That is the question facing the mighty City of London firm of Cazenove. Five years after Caz poured its investment banking business into a joint venture with the U.S. bank, JP Morgan <JPM.N>, it has to decide whether to go the whole hog and sell the remainder -- or to hang on.
Technically the shares are the subject of a put and call arrangement -- JP Morgan can force Caz's investors to sell and vice versa. But it is hard to imagine the Americans obliging the shareholders to sell if they clearly don't want to.
Which raises the question: why would they want to?
A deal has certain attractions for JP Morgan. The bank's UK business would be simpler if it owned 100 percent of its UK investment banking operations. The current set-up is quite advantageous for Caz. Not least it gives it access to JP Morgan's deep pockets and client list.