2023

2023 Open
2023 Open

Deutsche Bank to buy Numis in £410mn deal

28 April 2023

 

Summary and highlights

  • The Board of Numis and the Management Board of Deutsche Bank are pleased to announce that they have reached agreement on the terms of a recommended all-cash offer by Deutsche Bank for the entire issued and to be issued share capital of Numis. It is intended that the Transaction will be implemented by way of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006.
  • Under the terms of the Transaction, Numis Shareholders will be entitled to receive:

350 pence for each Numis Share (the “Transaction Value”)

valuing the entire issued and to be issued share capital of Numis at approximately £410 million.

  • The Transaction Value comprises for each Numis Share held as of the relevant record date:
    • 339 pence in cash (the “Cash Consideration”);
    • an interim dividend of 6 pence per Numis Share for the six months ended 31 March 2023, which is not conditional upon the Transaction becoming effective (the “First Permitted Dividend”); and
    • an additional interim dividend of 5 pence per Numis Share (the “Second Permitted Dividend”), which is conditional upon the Transaction becoming effective.
  • The Transaction Value represents:
    • a premium of 72 per cent. to the Closing Price of 204 pence per Numis Share on 27 April 2023 (being the last Business Day before this announcement); and
    • a premium of 60 per cent. to the volume-weighted average price of 219 pence per Numis Share for the three-month period ended 27 April 2023 (being the last Business Day before this announcement).

 

First Permitted Dividend and Second Permitted Dividend

  • In its interim results for the six months ended 31 March 2023, which Numis expects to announce on 5 May 2023, the Numis Directors intend to declare the First Permitted Dividend of 6 pence per Numis Share for the six months ended 31 March 2023 in accordance with Numis’ existing dividend policy.  Numis Shareholders on the register of members of Numis as at the relevant record date will be entitled to receive the First Permitted Dividend, regardless of whether the Transaction becomes effective and without any reduction in the Cash Consideration payable if the Transaction becomes effective.  The First Permitted Dividend is expected to be paid on or about 23 June 2023 to Numis Shareholders on the register of members of Numis as at 19 May 2023.
  • The Numis Directors intend to declare the Second Permitted Dividend of 5 pence per Numis Share before the Effective Date, settlement of which will be conditional upon the Transaction becoming effective, payable to all Numis Shareholders on the register of members of Numis as at the relevant record date, which is expected to be 6.00 p.m. on the Business Day immediately after the date of the Scheme Court Hearing.  If the Transaction becomes effective, the Second Permitted Dividend will be paid not more than 14 days after the Effective Date.
  • Deutsche Bank will have the right to reduce the Cash Consideration by the amount of any dividend (or other distribution) which is paid or becomes payable by Numis to Numis Shareholders other than the First Permitted Dividend and the Second Permitted Dividend.

Background to and reasons for the Transaction

  • The Transaction will allow Deutsche Bank to accelerate its Global Hausbank strategy by unlocking a much deeper engagement with the corporate client segment in the UK, enabling Deutsche Bank to become a leading provider to more than 170 corporate clients for their comprehensive financial and advisory needs.
  • The Management Board of Deutsche Bank and the Board of Numis are convinced that the Transaction represents an exciting strategic opportunity to combine Deutsche Bank’s existing UK and Ireland corporate finance business with Numis to establish a leading force in UK investment banking with a prominent position across corporate broking, strategic advisory (including M&A and growth capital), equity and debt capital markets and equity research, sales and execution, and to leverage Deutsche Bank’s comprehensive and global product offering across the Corporate Bank and the International Private Bank.
  • The UK is the largest investment banking market in Europe and Deutsche Bank has been evaluating how to accelerate the growth of its business in the UK. Numis is a diversified investment bank with a leading UK franchise and a long history of successfully delivering superior client service and growth and therefore represents a compelling strategic fit. Deutsche Bank and Numis strongly believe in the potential for the Transaction to unlock significant value within both the Numis and Deutsche Bank franchises.
  • Deutsche Bank’s current UK and Ireland corporate finance operations serve domestic and international corporate and private equity clients with a full-service product offering. Deutsche Bank believes that Numis’ corporate clients would benefit incrementally from certain services offered by Deutsche Bank, which at present Numis does not provide in-house, including its global M&A capability, debt capital markets, FX, corporate treasury, private banking services and broader balance sheet support. Similarly, a strengthened UK presence will enhance Deutsche Bank's ability to serve UK-based clients with global reach. The ability to provide a more comprehensive proposition may crystallise greater revenue opportunities within the combined corporate client base whilst also providing a broader platform to expand the attractiveness of the enlarged business to target new clients.
  • As one of the largest financial institutions globally, Deutsche Bank offers access to significant capital and operational resources, which help embed resilience across the Deutsche Bank platform and provide capacity for investment to capitalise on strategic opportunities through the cycle. The combination of Numis with Deutsche Bank’s UK and Ireland corporate finance activities will further enhance the scale and resilience of the combined UK business and its ability to pursue its strategic objectives.
  • Deutsche Bank is confident that there is strong and complementary cultural alignment between Deutsche Bank and Numis, with a shared long-term focus on building both client and employee relationships as well as an ambition to take advantage of new growth opportunities. Deutsche Bank believes that both businesses have the same professional, high performance and client-centric cultures that will enable the combined business to deliver high quality client service. Numis has harnessed its agility as it has expanded in recent years which is important to both its people and clients.  It is the combined intent that such a mindset remains central to how the business continues to operate under new ownership. Numis’ culture is a key contributor to its success and the quality of its platform and Deutsche Bank is focused on ensuring this is retained, while also allowing Numis to benefit from access to the significant resources of Deutsche Bank.
  • Deutsche Bank intends to co-brand with Numis for the relevant UK activities.

Numis Recommendation and Irrevocable Undertakings

  • The Numis Directors, who have been so advised by Fenchurch as to the financial terms of the Transaction, consider the terms of the Transaction to be fair and reasonable. In providing its advice to the Numis Directors, Fenchurch has taken into account the commercial assessments of the Numis Directors.  Fenchurch is providing independent financial advice to the Numis Directors for the purposes of Rule 3 of the Code.
  • Accordingly, the Numis Directors intend unanimously to recommend that Numis Shareholders vote in favour of the resolutions relating to the Transaction at the Meetings (or in the event that the Transaction is implemented by way of an Offer, to accept or procure acceptance of such Offer) as the Numis Directors have irrevocably undertaken to do in respect of their own entire beneficial holdings, amounting to 4,795,099 Numis Shares in aggregate representing approximately 4.4 per cent. of Numis’ issued share capital on 27 April 2023 (being the last Business Day before this announcement).
  • Deutsche Bank has also received an irrevocable undertaking from Aktieselskabet af 1.3.2017 to vote in favour of the Scheme (or in the event that the Transaction is implemented by way of an Offer, to accept or procure acceptance of such Offer) in respect of its entire beneficial holding of Numis Shares. The registered holder of Aktieselskabet af 1.3.2017’s entire beneficial holding of Numis Shares is HSBC Global Custody Nominee (UK) Limited. Aktieselskabet af 1.3.2017 is an investment vehicle which is wholly-controlled and 95% owned by Anders Holch Povlsen (with the remaining 5% ownership interest held by members of his family). Aktieselskabet af 1.3.2017 is the beneficial owner of 25,078,486 Numis Shares in aggregate, representing approximately 22.8 per cent. of Numis’ issued share capital on 27 April 2023 (being the last Business Day before this announcement).
  • Further details of these irrevocable undertakings are set out in Appendix 3 to this announcement.
  • In light of the expected timetable to obtain certain required regulatory approvals, the Transaction is currently expected to complete during the fourth quarter of 2023, subject to the satisfaction or (where applicable) waiver of the Conditions and certain further terms set out in Appendix 1 to this announcement.
  • Commenting on today’s announcement, Fabrizio Campelli, Head of Corporate Bank and Investment Bank at Deutsche Bank said:

“This Transaction is strongly aligned to our Global Hausbank strategy and has the potential to unlock significant value within both the Numis and Deutsche Bank franchises. We have been evaluating how to accelerate the growth of our business in the UK and, as a leading UK franchise with a long history of successfully delivering superior client service and growth, Numis represents a compelling strategic fit. The combination enables us to realise greater revenue opportunities across our shared client base and to deepen our engagement with UK corporates. There is strong and complementary cultural alignment between Deutsche Bank and Numis that will propel the combined business to deliver exceptional client service, and we look forward to welcoming Numis management and employees to the Deutsche Bank Group.”

  • Commenting on the Transaction, Luke Savage, Chairman of Numis said:

“The Numis Board is pleased to announce its unanimous recommendation of this cash offer for Numis, which not only represents an attractive proposition for Numis shareholders, but also provides a significant opportunity for clients, employees and wider stakeholders through this highly complementary combination. Numis has built one of the UK’s leading investment banking and equities franchises through an unwavering client centric culture, the quality of its people, excellence in execution and continued revenue diversification both internationally and into new business lines such as Growth Capital Solutions. The Numis Board is particularly pleased that Numis’ autonomy and independence are seen by Deutsche Bank as key contributors to its culture and the quality of its platform and that Deutsche Bank is focused on ensuring this is retained, while also allowing Numis to benefit from access to the significant resources of Deutsche Bank. Together with the strengths of Deutsche Bank, we are confident the business will be even better positioned for the future, continuing to accelerate the delivery of exceptional outcomes for all stakeholders of our business.”

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