London Daily

Focus on the big picture.
Tuesday, Dec 09, 2025

'Bombed-out valuations' still a worry for the City despite 'encouraging' Deutsche Bank takeover of Numis Securities

'Bombed-out valuations' still a worry for the City despite 'encouraging' Deutsche Bank takeover of Numis Securities

Germany's largest lender is incredibly warm about the UK's capital markets in its statement on the £410m deal, but it is also getting a bargain, which some sceptics may view as a distress sale.

For some time now, the City has been doing some soul-searching over its future.

There was a lot of speculation around the time of Brexit that, deprived of the "passport" that enabled UK-based firms to do business in the EU without having permission from each individual country regulator, there would be heavy job losses in the Square Mile and Canary Wharf as jobs haemorrhaged away to Frankfurt, Paris, Luxembourg, Dublin and Amsterdam.

That has failed to happen - and, in fact, some 45,000 more people are employed in the City and the Wharf than before the coronavirus pandemic.

More recently, though, there has been a lot of discussion about the attractiveness of the UK stock market.

The FTSE 100 has for some time been more cheaply rated than some of its global peers, not only the main US index, the S&P 500, but also some continental European peers such as the DAX 40 and CAC 40.

That has been accompanied by a trickle of bad news on individual listings.

The chip designer Arm Holdings, a flagship of the UK tech sector, resisted UK government entreaties to pursue a secondary stock market listing in London as it opted to list on the Nasdaq instead.

Arm snubbed London despite high level lobbying


Then CRH, the owner of Tarmac and the world's biggest building materials company, announced it was moving its main listing from London to New York and Flutter Entertainment, the owner of gaming businesses including Paddy Power and Betfair, indicated it would be doing the same.

Some of the commentary around all of these has created an impression that the lights were going out in offices across the Wharf and the Square Mile.

So news that Deutsche Bank is buying the broking and corporate advisory firm Numis Securities for £410m will have come as a surprise to many.

Not least because the statement from Germany's largest lender is so incredibly warm about the UK's capital markets.

Deutsche said that Numis, which employs 344 people, would enable it to engage more deeply with corporate clients in the UK.

It added: "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."

It is a statement that reads like a huge vote of confidence not only in Numis, its management and its employees, but also in the broader UK financial services sector and the City in particular.

That can particularly be argued in view of Deutsche's stated aim of becoming a so-called "house bank" - one which is focused on serving German businesses overseas or overseas businesses trading in Germany.

Thousands more work in the City than before the COVID-19 pandemic


Encouraging turn of events


Deutsche appears to be preparing for either an uptick in British investment in its homeland or of further German investment in the UK.

It is an encouraging turn of events.

Let's also be clear, though, that Deutsche is getting a bargain.

The 350p-a-share take-out price may well represent a 72% premium to the closing price on Thursday evening and a 60% premium to the average price at which Numis shares have traded over the last three months, but it is still only pitched at where shares of Numis were changing hands just 15 months ago.

What has happened since then, of course, is that Vladimir Putin invaded Ukraine and the global economy has been rocked by surging inflation as a consequence.

The way central banks around the world have been forced to respond by rapidly raising interest rates has led growth to slow everywhere and has slowed the volume of stock market flotations and mergers and acquisitions on which companies like Numis rely to generate fees.

That was particularly the case in the UK due to the extra layer of uncertainty created by the mini-budget in September last year.

Numis saw its revenues fall by one-third last year - so some sceptics may well view this as a distress sale.

Numis, founded in 1989 by the entrepreneur Oliver Hemsley, is far from being alone in this respect.

This deal comes barely a month after two smaller broking and advisory firms, FinnCap and Cenkos Securities, announced they were tying the knot.

Latest reflection of 'bombed-out valuations'


It is possible that there will be more consolidation after today and, to that end, it is worth noting that shares of Peel Hunt, a rival to Numis in particular, shot up 10% on the news.

And bear in mind also that a number of UK mid-cap companies - ironically the sort of businesses Numis and Peel Hunt advise - have recently agreed to takeovers or have been approached by would-be buyers.

They include John Wood Group, Dechra Pharmaceuticals, Dignity, Network International and Hyve Group and the interest stems partly because these companies are comparatively cheap.

So, while this takeover does feel like a vote of confidence in the City, it is also the latest reflection of the bombed-out valuations on which some UK-listed stocks have been trading.

Newsletter

Related Articles

0:00
0:00
Close
UK Warns of Escalating Cyber Assault Linked to Putin’s State-Backed Operations
UK Consumer Spending Falters in November as Households Hold Back Ahead of Budget
UK Orders Fresh Review of Prince Harry’s Security Status After Formal Request
U.S. Authorises Nvidia to Sell H200 AI Chips to China Under Security Controls
"App recommendation" or disguised advertisement? ChatGPT Premium users are furious
"The Great Filtering": Australia Blocks Hundreds of Thousands of Minors From Social Networks
Mark Zuckerberg Pulls Back From Metaverse After $70 Billion Loss as Meta Shifts Priorities to AI
Nvidia CEO Says U.S. Data-Center Builds Take Years while China ‘Builds a Hospital in a Weekend’
Indian Airports in Turmoil as IndiGo Cancels Over a Thousand Flights, Stranding Thousands
Hollywood Industry on Edge as Netflix Secures Near-$60 Bln Loan for Warner Bros Takeover
Drugs and Assassinations: The Connection Between the Italian Mafia and Football Ultras
Hollywood megadeal: Netflix acquires Warner Bros. Discovery for 83 billion dollars
The Disregard for a Europe ‘in Danger of Erasure,’ the Shift Toward Russia: Trump’s Strategic Policy Document
Two and a Half Weeks After the Major Outage: A Cloudflare Malfunction Brings Down Multiple Sites
UK data-regulator demands urgent clarity on racial bias in police facial-recognition systems
Labour Uses Biscuits to Explain UK Debt — MPs Lean Into Social Media to Reach New Audiences
German President Lays Wreath at Coventry as UK-Germany Reaffirm Unity Against Russia’s Threat
UK Inquiry Finds Putin ‘Morally Responsible’ for 2018 Novichok Death — London Imposes Broad Sanctions on GRU
India backs down on plan to mandate government “Sanchar Saathi” app on all smartphones
King Charles Welcomes German President Steinmeier to UK in First State Visit by Berlin in 27 Years
UK Plans Major Cutback to Jury Trials as Crown Court Backlog Nears 80,000
UK Government to Significantly Limit Jury Trials in England and Wales
U.S. and U.K. Seal Drug-Pricing Deal: Britain Agrees to Pay More, U.S. Lifts Tariffs
UK Postpones Decision Yet Again on China’s Proposed Mega-Embassy in London
Head of UK Budget Watchdog Resigns After Premature Leak of Reeves’ Budget Report
Car-sharing giant Zipcar to exit UK market by end of 2025
Reports of Widespread Drone Deployment Raise Privacy and Security Questions in the UK
UK Signals Security Concerns Over China While Pursuing Stronger Trade Links
Google warns of AI “irrationality” just as Gemini 3 launch rattles markets
Top Consultancies Freeze Starting Salaries as AI Threatens ‘Pyramid’ Model
Macron Says Washington Pressuring EU to Delay Enforcement of Digital-Regulation Probes Against Meta, TikTok and X
UK’s DragonFire Laser Downs High-Speed Drones as £316m Deal Speeds Naval Deployment
UK Chancellor Rejects Claims She Misled Public on Fiscal Outlook Ahead of Budget
Starmer Defends Autumn Budget as Finance Chief Faces Accusations of Misleading Public Finances
EU Firms Struggle with 3,000-Hour Paperwork Load — While Automakers Fear De Facto 2030 Petrol Car Ban
White House launches ‘Hall of Shame’ site to publicly condemn media outlets for alleged bias
UK Budget’s New EV Mileage Tax Undercuts Case for Plug-In Hybrids
UK Government Launches National Inquiry into ‘Grooming Gangs’ After US Warning and Rising Public Outcry
Taylor Swift Extends U.K. Chart Reign as ‘The Fate of Ophelia’ Hits Six Weeks at No. 1
250 Still Missing in the Massive Fire, 94 Killed. One Day After the Disaster: Survivor Rescued on the 16th Floor
Trump: National Guard Soldier Who Was Shot in Washington Has Died; Second Soldier Fighting for His Life
UK Chancellor Reeves Defends Tax Rises as Essential to Reduce Child Poverty and Stabilise Public Finances
No Evidence Found for Claim That UK Schools Are Shifting to Teaching American English
European Powers Urge Israel to Halt West Bank Settler Violence Amid Surge in Attacks
"I Would Have Given Her a Kidney": She Lent Bezos’s Ex-Wife $1,000 — and Received Millions in Return
European States Approve First-ever Military-Grade Surveillance Network via ESA
UK to Slash Key Pension Tax Perk, Targeting High Earners Under New Budget
UK Government Announces £150 Annual Cut to Household Energy Bills Through Levy Reforms
UK Court Hears Challenge to Ban on Palestine Action as Critics Decry Heavy-Handed Measures
Investors Rush Into UK Gilts and Sterling After Budget Eases Fiscal Concerns
×