FEES from helping M&S to fend off a bid approach by Philip Green fuelled a 49 per cent surge in sales at Cazenove, which yesterday insisted that discussions over the future of the stockbroker remained “work in progress”.

While the board of Cazenove refused to comment to shareholders about the progress of takeover talks at the company’s annual meeting, David Mayhew, the chairman, did say: “No action will be taken unless the board concludes that a transaction is clearly in the best interests of our clients, employees and shareholders.

“This process is still work in progress. We are working hard to find the correct solution.”

Cazenove, the 181-year-old stockbroker, is currently weighing up at least two deals involving larger American banks. It has yet to agree exclusivity with any interested party, despite the fact that informal talks have been going on for nearly four months.

Mr Mayhew also pointed out that remaining independent was still an option for the broker.

One deal involves the formation of a joint venture with JP Morgan Chase, America’s second-biggest bank. The US bank would pay some upfront cash and give Cazenove access to its balance sheet, allowing Cazenove to distribute some capital — thought to be up to £400 million — to its investors.

Fifty of JP Morgan’s corporate finance team would join the broker, but Mr Mayhew would continue as chairman, with Robert Pickering remaining as chief executive.

The second deal, which is thought to be less likely to succeed, would involve a straightforward takeover by Lehman Brothers, another Wall Street firm. Lehmans is believed to have offered £500 million upfront for the firm, with the possibility of another £300 million subject to its performance.

The two American banks may not be the only companies still considering a deal with Cazenove. Barclays looked at the business earlier this year. Citigroup, which bought the investment banking business of Schroders four years ago, has also been named as a possible bidder.

Figures released by Cazenove yesterday showed that the uncertainty over the future of the firm had not affected its performance in the three months to the end of July. Revenue increased by 49 per cent to £71 million, with pre-tax profit rising from £2.1 million to £14.8 million. Profits for the full year to the end of April were three times the level of last year.

The group’s fund management business added £270 million of funds under management, bringing the total at the end of the quarter to £7.4 billion. There has been some speculation that Cazenove will sell off its investment management arm if a takeover deal or joint venture is agreed. Last year it turned down an informal approach from New Star Asset Management.

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