London Daily

Focus on the big picture.
Saturday, Apr 11, 2026

'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
Meghan Markle Plans Exclusive Women-Focused Retreat During Australia Visit
Starmer and Trump Hold Strategic Talks on Securing Strait of Hormuz Amid Rising Tensions
Unofficial Australia Visit by Prince Harry and Meghan Expected to Stir Tensions with Royal Circles
Pipeline Attack Cuts Significant Share of Saudi Arabia’s Oil Export Capacity
UK Stocks Rise on Ceasefire Momentum and Renewed Focus on Diplomacy
UK to Hold Further Strategic Talks on Strait of Hormuz Security
Starmer Voices Frustration as Global Tensions Drive Up UK Energy Costs
UK Students Voice Concern Over Proposal for Automatic Military Draft Registration
Rising Volatility Drives Uncertainty in UK Fuel and Petrol Prices
UK Moves to Deploy ‘Skyhammer’ Anti-Drone System to Strengthen Airspace Defense
New Analysis Explores UK Budget Mechanics in ‘Behind the Blue’ Feature
Man Arrested After Four Die in Channel Crossing Tragedy
UK Tightens Immigration Framework with New Sponsor Rules and Fee Increases
UK Foreign Secretary Highlights Impact of Intensified Strikes in Lebanon
UK Urges Inclusion of Lebanon in US-Iran Ceasefire Framework
UK Stocks Ease as Ceasefire Doubts in Middle East Weigh on Investor Confidence
UK Reassesses Cloud Strategy Amid Criticism Over Limited Support Measures
UK Calls for Full and Toll-Free Access Through Strait of Hormuz Amid Rising Tensions
Starmer Signals Strategic Shift for Britain Amid Escalating Iran-Linked Tensions
UK Issues Firm Warning to Russia Over Covert Underwater Military Activity
OpenAI Halts Stargate UK Project, Casting Uncertainty Over Britain’s AI Expansion Plans
Starmer Voices Frustration Over Global Pressures Driving UK Energy Costs Higher
UK Deploys Military Assets to Protect Undersea Cables From Suspected Russian Threat
Canada Aligns With US, UK and Australia as Europe Prepares Major Digital Border Overhaul
Meghan Markle’s Planned Australia Appearance Sparks Fresh Speculation
Starmer Warns Sustained Effort Needed to Ensure US–Iran Ceasefire Holds
UK to Partner with Shipping Industry to Rebuild Confidence in Strait of Hormuz, Cooper Says
UK Interest Rate Expectations Ease Following US–Iran Ceasefire Agreement
Starmer Signals Major Effort Needed to Fully Reopen Strait of Hormuz During Gulf Visit
UK Fuel Prices Face Ongoing Volatility Amid Global Pressures and Domestic Factors
Kanye West’s Planned Italy Festival Appearance Draws Debate After UK Entry Ban
Smuggling Routes Shift Toward Belgium as Migrant Crossings to UK Evolve
Ceasefire Offers Potential Relief for UK Fuel and Food Prices Amid Ongoing Uncertainty
Iran Conflict Raises Questions Over UK’s Global Influence and Military Preparedness
Senator McConnell Visits Kentucky to Highlight Federal Investment in Local Projects
Kanye West Barred from Entering UK as Legal Grounds Come into Focus
UK Denies Visa to Kanye West After Sponsors Withdraw from Wireless Festival
Trump-Era Forest Service Restructuring Leads to Closure of UK Lab Focused on Kentucky Woodland Health
Foreign Students in the UK Describe Harsh Living Conditions and Financial Pressures
Reform UK Proposes Visa Restrictions on Nations Pursuing Reparations Claims
Public Reaction Divides Over UK Decision to Bar Kanye West
Calls Grow for UK to Review US Base Access Following Concerns Over Escalating Rhetoric
UK Indicates It Will Not Permit Use of Its Bases for Potential US Strikes on Iran’s Energy Infrastructure
UK Prime Minister Defends Decision to Bar Kanye West, Questions Festival Booking
UK Accelerates Efforts to Harmonise Medical Technology Rules with United States
Wireless Festival Cancelled After Kanye West Denied Entry to the United Kingdom
Australia’s most decorated living soldier was arrested at Sydney Airport and charged with five counts of war-crime murder for the killing of unarmed Afghan civilians
The CIA’s Secret Technology That Can Find You by Your Heartbeat Successfully Locates Downed Airman
Operation Europe: Trump Deploys Vance to Hungary to Save the EU
King Charles Faces Criticism From Some UK Christians Over Absence of Easter Message
×