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Prestbury fails in MBO

Prestbury has failed to secure backing from external shareholders for its proposed management buyout.

Chief executive Lee Birkett says he is disappointed by the decision as he does not believe Prestbury should be a publicly quoted company as being listed makes it harder to make acquisitions.

Prestbury’s executive management announced on January 31 that it had started discussions with the firm’s independent directors regarding a possible management buyout. These talks officially ended this month.

Birkett says the talks ended as it could not get external shareholder value for the MBO but he says the decision is not all bad news as it has managed to raise £5m cash as part of the process.

Birkett says: “It served its purpose, in that we raised £5m. We need the money markets to open up before anything else can happen. The market is in a precarious situation. Everyone is watching it very closely.”

Birkett says he will not rule out the executive management attempting an MBO again.

Prestbury recently withdrew from the IFA sector to concentrate on mortgages, blaming challenging market conditions. Following a stress and risk test assessment with the FSA, Prestbury decided that being in the adviser market did not merit the risks involved.

Hamptons managing director Jonathan Cornell says: “It is a lot harder to do a management buyout in the current climate, particularly getting the finance required.”

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Jeremy Pearson is Technical Support Manager with Canada Life’s ican Technical Services Team. Canada Life offers a range of wealth management solutions, including retirement income planning, estate planning and investment solutions from a choice of jurisdictions, including the UK, Isle of Man and Republic of Ireland. Many parents value the standard of education offered by […]

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