EFG-Hermes, the Egyptian investment bank with extensive operations in the Gulf, has bought 9.97 per cent stake in Panmure Gordon, the London stockbroker.

EFG-Hermes is paying 47p cash per share, or £3.2m, for 6.7 million newly issued shares. Panmure's shares, which are listed on the Alternative Investment Market, rose 3.5p to 50p today.

The holding will lead to increased co-operation between the two groups and help Panmure Gordon, which has been beset in the past few months by rumours of a takeover or management buyout, gain a foothold in the Middle East and North Africa, and enable EFG-Hermes increase its presence in Europe and the US.

Tim Linacre, chief executive at Panmure Gordon, told Times Online that the most immediate effect of the deal would be for some Panmure staff to move to EFG-Hermes offices in the Middle East, and several of the Egyptian bank’s employees joining Panmure’s London offices.

He said: “The world is changing and becoming more international and to help our clients we wanted to have a foothold in the Gulf. We also want to attract more Gulf investors.

“I have been trying to get the business in as good a shape as possible so we can take advantage when the markets start to get better.”

Persistent rumours about the future of Panmure Gordon, founded in 1876, have included the possibility of a merger with Evolution Securities, another small investment bank based in London, or a management buyout. It has also been dogged by speculation about the performance of its US arm, Think Equity.

There are no plans at present for EFG-Hermes to take a seat on Panmure Gordon’s board.

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