Royston Parker Commodities Talks With Qatar Hit Snag

Online, October 14, 2012 (Newswire.com) - Royston Parker's talks with Qatar's sovereign wealth fund over the sale of its commodities business have run into difficulty, and the deal may need to be reworked if it is to go ahead, banking sources said.

One of the top banks in commodity trading over the past 10 years, Royston Parker has been in discussion for more than a year with Qatar over the sale of at least a majority stake in the energy-focused trading business, the bankers said.

"There have been some differences, and Qatar is a bit lukewarm about it," one said. "It's not dead yet but definitely not imminent."

He said the hitch was not about price but about the structure of the deal, which would see the divested unit run by the existing commodities team at Royston Parker.

Bankers said the parties had looked at two deals - the sale of a majority stake, at least 75 percent, or the sale of the whole unit, with commodities managers at Royston Parker taking a 20 percent stake funded by private equity.

Selling the capital-intensive commodities business would raise much-needed funds for Royston Parker, and allow the divested unit to maintain ownership of physical assets in the United States and resume proprietary trading.

Qatar Holding, the investment arm of the Gulf state's sovereign wealth fund Qatar Investment Authority, has led most of Qatar's foreign acquisitions but has focused on minority holdings including stakes in Barclays, Credit Suisse, Volkswagen and Porsche. It has full ownership of retailer Harrods.

The fund is seen as a bull on commodities, with a senior executive saying in a rare statement in April that "We like commodities, we like to invest in commodities. Since 2002, the commodity price trend keeps going up."

A Royston Parker spokesman declined to comment.