SMALL CAP MOVERS: Panmure Gordon eyes up FinnCap; Sondrel rises on market debut

Two of the City’s most flamboyant and controversial characters burst back onto the small cap scene this week as AIM-focused broker FinnCap found itself in the cross hairs of fellow broker Panmure Gordon.

A 146-year-old institution of the London brokerage scene, Panmure Gordon was taken over by former Barclays chief Bob Diamond, who subsequently installed his former right-hand man Rich Ricci as the firm’s chief executive officer.

As Barclays’ big-swingers in the early 2010s, ‘Diamond Bob’ and Ricci garnered a reputation for their eccentric personalities (and dapper outfits), eye-watering bonuses and a raft of controversies.

In 2012, Barclays was fined £290million under Diamond’s watch for a ‘serious, widespread’ role in rigging interest rates as part of the Libor scandal.

Diamond would resign from Barclays following the fallout from the scandal; Ricci would retire soon after.

Ricci also coordinated Barclays’ acquisition of the Lehman Brothers, which gave Barclays a lucrative Wall Street footing for a bargain price of $250million (a fraction of the $4billion Diamond was willing to pay before Lehman’s collapse).

Now as overseers at Panmure Gordon, they have the financial backing of the Qatari royal family – which is a majority owner of the firm – behind them.

While discussions are at an early stage, FinnCap has confirmed speculation that the firm has ‘received indicative non-binding proposals from Panmure Gordon regarding a possible combination of the two companies structured as the acquisition for cash’.

As per City code regulations, Panmure Gordon is now required to make a formal intention of offer on FinnCap.

The news comes as small and mid-cap city brokers face a crisis amid a dried-up London IPO market, though, Friday marked a rare occasion for this year’s AIM market as a company did indeed float.

Specifically, Sondrel Holdings, a fabless semiconductor designer, listed under the SND ticker.

While it is a surprising time for an IPO, let alone in the volatile semiconductor space, Sondrel is seeking funds to hire new engineers and expand its US footprint.

The company raised £20million through the issue of 36.4million shares at a price of 55p each, adding that it had received ‘strong support’ from institutional investors. Shares moved up to 58p in early dealings.

Foreign exchange specialist Alpha FX Group also rallied over 10 per cent following news that it’s full-year profits are forecast to be ‘materially ahead’ of expectations.

‘Our tried and tested strategy in FX risk management continues to be successful within the current macroeconomic conditions and we remain committed to ensuring our clients are advised appropriately whilst continuing to manage our own risk profile,’ said founder and chief executive officer Morgan Tillbrook.

Victoria was also trending in the right direction following the fabric manufacturer and supplier’s $28.5million acquisition of Florida-based International Wholesale Tile. Shares proceeded to rally 11 per cent to 504p on Friday.

For the junior market overall it was a tricky week and its top shares fell reflecting the uncertainty and political chaos in the UK.

The AIM 100 index’s drop of 0.63 per cent to 3,709 was at least a better performance than the FTSE 100.

Among the fallers North Sea gas operator IOG shed more than half of its market value following a sizeable downgrade to its production guidance.

Sweeping management changes were announced on Wednesday, including the departure of chief executive Andrew Hockey and chief operating officer David Gibson.

Shares fell as low as 8.2p from 18.7p but have since rebounded to slightly above 11p.

Another struggler was Boohoo, where the shares dipped 5.5 per cent to 38p on Friday as the online clothing retailer battles with slashed forecasts as the sector faces macro pressures.

Deutsche Bank reduced Boohoo’s rating from ‘buy’ to ‘hold’ after slashing its target price to 36p from 140p, stating: ‘Our view that online sales would return to structural growth after one year of post-COVID normalisation has been wrong.

‘We underestimated the impact of inflation on the consumer, operating costs and valuations.’