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Cazenove king Mayhew shows deal timing never better
November 19, 2009 / 1:23 PM / 8 years ago

Cazenove king Mayhew shows deal timing never better

LONDON (Reuters) - Five years ago David Mayhew was under fire for selling out to a U.S. investment bank in a deal that would see British blue-blood stockbroker Cazenove gobbled up and spat out.

Now Cazenove remains the top advisor to Britain’s biggest firms and Mayhew has sealed his reputation as ‘King of the City’ by agreeing the full sale of his firm to JPMorgan (JPM.N) at a good price, earning millions for himself and colleagues.

Mayhew, a fly fishing and pedigree cattle expert, has been at Cazenove for 40 years and chairman for the last eight. He has the ear of more top UK executives and institutional investors than any other banker, according to people across the industry.

“He is ferociously well connected,” the chief executive of one firm said.

The urbane, traditional merchant banker is renowned for his charm and discretion. A man of few words, he has an admired reading of the stock market and on how the market will react to deals, people say.

“He has the ability to make clients feel they get special attention, so they think: ‘David’s my man.’ That’s a great skill,” one banker said.

Mayhew will land a 19 million pound ($31.7 million) windfall from Thursday’s deal.

Supporters say that’s his reward for four decades helping to make Cazenove the adviser of choice to more top UK companies than any of his bigger rivals.

The path to those riches has not always been smooth, however. He was charged in a share price scandal of the late 1980s surrounding the Guinness takeover of Scotch whisky company Distillers, but all charges were dropped. Cazenove came out in robust support of its man.

When Mayhew first got into bed with JPMorgan he was criticized for not selling out earlier for a higher price. Some staff left in the early days, fuelling criticism that the marriage would not work, cultures would clash and clients would desert. One JPMorgan banker said the worry was they would “trample all over Cazenove with their cowboy boots.”

Soon after the tie-up started it became embroiled in a row over the takeover of English soccer club Manchester United by an American tycoon, after Cazenove and JPMorgan had conflicting roles in the deal.

But the reality was that JPMorgan was a good match. Cazenove needed the balance sheet strength its U.S. partner provided -- more than ever to help clients during the financial crisis.

In a record year for equity fundraising in Britain, JPMorgan Cazenove has advised on most big deals, such as bumper rights issues by HSBC (HSBA.L) and Rio Tinto (RIO.L).


Mayhew, 69, will remain as chairman of JPMorgan Cazenove. A past criticism was that his dominance had held back others, but now people like head of equities Alan Carruthers have gained greater prominence.

“If he left tomorrow there would be a blip, but five years ago it would have been a disaster,” one banker said.

Mayhew and his company represent the old-style City of London. He was educated at Eton, one of Britain’s most exclusive schools, and then went straight into stockbroking.

He began his career at another old City firm, Panmure Gordon and moved to Cazenove in 1969, becoming partner in 1972.

Part of Cazenove’s elitist attraction has been its unfailing adherence to British traditions, with its tail-coated doormen and oil paintings of former partners.

There is an unspoken dress code, for male staff at least, according to bankers who have worked there: black lace-up shoes, grey socks, double-cuffed shirts and pin-striped suits.

One J.P. Morgan banker who joined the joint venture said when he took off his tie, “the Caz lot reacted as though I’d streaked naked across the office.”

editing by John Stonestreet

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