They will start trading again in December.Cazenove’s fund-management business is excluded from the deal, which is set to open for business by March next year. Mr Pickering and Michael Power of Cazenove take over as chief executive and finance director of the venture. Three of JP Morgan’s top global investment banking heads will join the board as non-executive directors, Bill Winters, Klaus Diederichs and John Corrie.. The US Senate is about to open an investigation into allegations that some of America’s largest insurers and brokers have taken part in schemes to rig insurance bids and to gain inappropriate fees from customers. Mr Fitzgerald, who has a reputation for pursuing America’s financial companies over various misdemeanours, also led an investigation into the mutual fund sector earlier this year which resulted in companies agreeing to lower their charges for ordinary investors.The Senate inquiry will add to the pressure on the insurers and brokers, after Eliot Spitzer, New York’s attorney general, launched a lawsuit last month against Marsh. Institutional shareholders including Standard Life, Axa, Legal and General, Prudential and 3i, had paid £5 per share in April 2001 when Cazenove was incorporated to prepare for a flotation that was shelved in January 2003 when stock markets were in decline.Mr Mayhew declined to estimate the value of the deal, but sources close to the two firms put the valuation for Cazenove implied in the deal at anything between £750m and £1bn That is below its value of about £1.1bn three years ago.

I’m committed to making this successful.”The partnership, to be called JP Morgan Cazenove, will combine Cazenove’s broking and advisory business with JP Morgan’s UK investment banking arm in a jointly owned company. We will work as two organisations with one mind.”JP Morgan will pay £110m to Cazenove for its share in the joint venture, and both will contribute £50m of capital. Cazenove’s shareholders – 58 per cent of whom are current employees, 32 per cent former partners and other staff and 10 per cent institutions – will get £1.50 per share and a half share in the business, which the firms estimated would have had pro-forma profits of about £80m in the year to April 2004, double Cazenove’s profits for that year. The deal could pave the way for a full takeover of Cazenove, with both sides granted an option to buy out the other’s share in the venture in five years’ time.Mr Mayhew said, “Some people question how we will maintain independent advice The advisory culture will be unimpaired.

Britain’s oldest independent stockbroker Cazenove has sealed a joint venture with JP Morgan Chase, in effect ending 181 years of independence and paving the way for a full takeover Cazenove will pay out £340m to its 1,000 shareholders. Cazenove, broker to the Queen, will retain operational independence while gaining access to JP Morgan’s product range, capital and international network. The No 2 US investment bank gains access to Cazenove’s prized client list, including 43 of Britain’s blue-chip companies.Some commentators were sceptical, however, about how the revenue-sharing agreement would work in practice.The venture will see 70 JP Morgan bankers moving to Cazenove’s Moorgate offices in London, which already house 750 Cazenove staff. He said, “I do not expect to be out of this job for two to three years If I can add value I’d like to stay. At 64, Mr Mayhew is close to retirement but he pledged to see the deal through. Cazenove will pay out £340m to its 1,000 shareholders.
David Mayhew, Cazenove’s chairman who will chair the new venture, will get about £5.3m for his 3.5 million shares while the chief executive, Robert Pickering, will take about £4m for his 2.67 million shares.

Today, Cazenove has about 1,000 staff – 750 in London, with the rest in New York, Frankfurt, Paris, Hong Kong, Singapore, Beijing and Johannesburg.The firm changed from a partnership to corporate status in April 2001, raising equity and debt finance from institutional investors including many life companies, who together obtained a 10 per cent slice of the company.The incorporation formed part of Cazenove’s plan to work towards a flotation, which was eventually abandoned in January 2003 when the stock markets slumped.Increasing competition from the large US investment banks eventually forced Cazenove to consider approaches by various suitors, including Lehman Brothers, Citigroup and Barclays.. Even during the turbulent period of “Big Bang” in the mid-1980s, when the stock market was deregulated and brokers and merchant banks were allowed to merge, Cazenove managed to stay independent despite being courted by bigger investment banks, while many other brokerages merged or were taken over.Throughout the 1980s and 1990s it expanded its business, reaching out abroad. One banker recalled a meeting where a Cazenove partner was asked if he wanted to take off his jacket. The partner replied: “Gentlemen wear coats, not jackets.”In the 1980s Cazenove played an important role in most of the British government’s privatisation issues.

Its partners generally hailed from the upper tiers of British society and wore bespoke suits. It acted as broker for an issue by the Metropolitan District Railway Company which helped to build the London Underground. Cazenove was also involved in exotic new issues such as His Highness the Nizam’s State Railway Company, as well as the rather more mundane Metropolitan Sewage and Essex Reclamation Company.By the mid-1930s it had established a reputation as one of London’s pre-eminent stockbroking partnerships and was known for its discretion. Cazenove’s Joint venture with the number two US investment bank, JP Morgan, which could lead to a full takeover of Cazenove in five years’ time, marks the end of an era for Britain’s oldest independent stockbroker.
The firm was established in 1823 as a partnership and remained one until incorporating as a private company in April 2003, letting in external shareholders for the first time.Unlike many of its rivals, such as Smith New Court and SG Warburg, which were taken over by foreign predators several years ago, Cazenove managed to hang on to its independence until yesterday.Cazenove is the leading corporate broker in Britain, acting for 43 blue-chip companies. The family of a man who died in police custody were said to be “devastated” last night after a High Court judge indicated he would overturn an inquest verdict of unlawful killing. After teaming up with Joseph Laurence and Charles Pearce, Mr Cazenove branched out on his own, and eventually formed a partnership with his son and nephew in 1854.The business prospered, managing stock issues and fund-raisings.