London Daily

Focus on the big picture.
Saturday, Nov 08, 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 Government Turns to Denmark-Style Immigration Reforms to Overhaul Border Rules
UK Chancellor Warned Against Cutting Insulation Funding as Budget Looms
UK Tenant Complaints Hit Record Levels as Rental Sector Faces Mounting Pressure
Apple to Pay Google About One Billion Dollars Annually for Gemini AI to Power Next-Generation Siri
UK Signals Major Shift as Nuclear Arms Race Looms
BBC’s « Celebrity Traitors UK » Finale Breaks Records with 11.1 Million Viewers
UK Spy Case Collapse Highlights Implications for UK-Taiwan Strategic Alignment
On the Road to the Oscars? Meghan Markle to Star in a New Film
A Vote Worth a Trillion Dollars: Elon Musk’s Defining Day
AI Researchers Claim Human-Level General Intelligence Is Already Here
President Donald Trump Challenges Nigeria with Military Options Over Alleged Christian Killings
Nancy Pelosi Finally Announces She Will Not Seek Re-Election, Signalling End of Long Congressional Career
UK Pre-Budget Blues and Rate-Cut Concerns Pile Pressure on Pound
ITV Warns of Nine-Per-Cent Drop in Q4 Advertising Revenue Amid Budget Uncertainty
National Grid Posts Slightly Stronger-Than-Expected Half-Year Profit as Regulatory Investments Drive Growth
UK Business Lobby Urges Reeves to Break Tax Pledges and Build Fiscal Headroom
UK to Launch Consultation on Stablecoin Regulation on November 10
UK Savers Rush to Withdraw Pension Cash Ahead of Budget Amid Tax-Change Fears
Massive Spoilers Emerge from MAFS UK 2025: Couple Swaps, Dating App Leaks and Reunion Bombshells
Kurdish-led Crime Network Operates UK Mini-Marts to Exploit Migrants and Sell Illicit Goods
UK Income Tax Hike Could Trigger £1 Billion Cut to Scotland’s Budget, Warns Finance Secretary
Tommy Robinson Acquitted of Terror-related Charge After Phone PIN Dispute
Boris Johnson Condemns Western Support for Hamas at Jewish Community Conference
HII Welcomes UK’s Westley Group to Strengthen AUKUS Submarine Supply Chain
Tragedy in Serbia: Coach Mladen Žižović Collapses During Match and Dies at 44
Diplo Says He Dated Katy Perry — and Justin Trudeau
Dick Cheney, Former U.S. Vice President, Dies at 84
Trump Calls Title Removal of Andrew ‘Tragic Situation’ Amid Royal Fallout
UK Bonds Rally as Chancellor Reeves Briefs Markets Ahead of November Budget
UK Report Backs Generational Smoking Ban Ahead of Tobacco & Vapes Bill Review
UK’s Domino’s Pizza Group Reports Modest Like-for-Like Sales Growth in Q3
UK Supplies Additional Storm Shadow Missiles to Ukraine as Trump Alleges Russian Underground Nuclear Tests
High-Profile Broodmare Puca Sells for Five Million Dollars at Fasig-Tipton ‘Night of the Stars’
Wilt Chamberlain’s One-of-a-Kind ‘Searcher 1’ Supercar Heads to Auction
Erling Haaland’s Remarkable Run: 13 Premier League Goals in 10 Matches and Eyes on History
UK Labour Peer Warns of Emerging ‘Constituency for Hating Jews’ in Britain
UK Home Secretary Admits Loss of Border Control, Warns Public Trust at Risk
President Trump Expresses Sympathy for UK Royal Family After Title Stripping of Prince Andrew
Former Prince Andrew to Lose His Last Military Title as King Charles Moves to End His Public Role
King Charles Relocates Andrew to Sandringham Estate and Strips Titles Amid Epstein Fallout
Two Arrested After Mass Stabbing on UK Train Leaves Ten Hospitalised
Glamour UK Says ‘Stay Mad Jo x’ After Really Big Rowling Backlash
Former Prince Prince Andrew Faces Possible U.S. Congressional Appearance Over Jeffrey Epstein Inquiry
UK Faces £20 Billion Productivity Shortfall as Brexit’s Impact Deepens
UK Chancellor Rachel Reeves Eyes New Council-Tax Bands for High-Value Homes
UK Braces for Major Storm with Snow, Heavy Rain and Winds as High as 769 Miles Wide
U.S. Secures Key Southeast Asia Agreements to Reshape Rare Earth Supply Chains
US and China Agree One-Year Trade Truce After Trump-Xi Talks
BYD Profit Falls 33 % as Chinese EV Maker Doubles Down on Overseas Markets
US Philanthropists Shift Hundreds of Millions to UK to Evade Regulatory Uncertainty in Trump Era
×