Keith Harris: ‘Gerova Talks Still On’
One of the leading deal-makers in British business was last night [Feb. 17] working to salvage a merger between his own Seymour Pierce investment bank and beleagured Bermuda reinsurer Gerova, according to UK media reports.
Shares in Gerova Financial Group rebouded nearly 18 percent on the New York Stock Exchange amid reports British tycoon Keith Harris was attempting to ensure the £40 million merger with the Bermuda firm goes ahead.
Banker and broker Mr. Harris [pictured], who specialises in high-profile mergers and aquisitions and is known for advising Premier League football clubs in the UK, was insisting yesterday that the “talks were still on”, according to sources who spoke to London’s “Daily Telegraph.”
Although share prices in Bermuda-based Gerova have improved after plummeting earlier this week, they are still down almost 80 percent on last June amid growing concerns about its finances and the value of assets on its books.
“The chaos surrounding Mr. Harris’s own transfer deal is threatening his reputation as one of Britain’s most astute deal-makers,” said the “Telegraph”. “The financier, who has built Seymour Pierce into one of London’s best known brokers, said in December he was in talks to be taken over by Gerova, which is domiciled in Bermuda but managed from New York.
“The early plans included making Mr Harris chairman of the combined firm which would take the name of Seymour Pierce. Mr Harris was set to collect an estimated £10 million payout from his 25 percent stake in Seymour Pierce.”
However, reports claim the US Securities and Exchange Commission (SEC) have questioned the asset values of Stillwater, a money management firm purchased by Gerova.
And last week Mr Harris said he had postponed his plans to become chairman of the new venture. Gerova’s stock went into free-fall immediately after Mr. Harris said he was deferring taking over as Gerova’s chief executive as previously announced
Gerova, which argues its plunging stock was being manipulated, sought to boost confidence with a management and boardroom shake-up last week which resulted in the resignations of chairman Gary Hirst and four others.
Dennis Pelino, a logistics entrepreneur, was named as Gerova’s new chairman. Gerova described Mr. Pelino as “uniquely qualified for this responsibility”. On Wednesday night, Gerova shares fell more than a third in the wake of the bombshell that Mr. Pelino had suddenly decided not to take up his position.
Gerova’s merger with Seymour Pierce was expected to close by the end of the first quarter. Michael Hlavsa, Gerova’s chief financial officer, is to lead the firm — which operates out of Cumberland House on Victoria Street – until it appoints a new chairman.
Keith Harris is known as “Mr. Football” in British business circles. Deals he’s brokered include selling Chelsea to Roman Abramovich, Aston Villa to Rander Lerner and recently was one of the “Red Knights” who attempted to buy Manchester United.
He played semi-professional football with Bradford Park Avenue before training as an economist. His banking career has included stints at Drexel Burnham, Apax and Morgan Grenfell. He also headed the HSBC Investment Bank until 1999.
