After a series of failed takeover discussions, Close Brothers’ chief executive Colin Keogh has fallen out of favour with some of the firm’s biggest shareholders and there are moves afoot to replace him with finance director Jonathan Howell. Considering the merchant bank’s share price is sitting at an almost five-year low of £5.85, rumours of an ousting are hardly surprising.

What’s happened

Cenkos and Landsbanki jointly launched a £9.50 a share offer for the FTSE 250 finance house back in November. Close rejected the offer, but negotiations got under way after the consortium upped its bid to £10.25 a share. Talks broke down in late January with Cenkos accusing senior management at Close of being ‘obstructive’.

Then private equity firm Blackstone and Japanese financial group Orix threw their hats into the takeover ring, only to pull out in February, citing current market conditions and disagreements over Close’s valuation. Interest from India’s Tata also amounted to nothing and on February 29 Close said it was no longer in discussions with anyone over a takeover.

In a statement released with its interim results, the group said: ‘no bidder was able to deliver ‘a firm, fully financed, offer’. It also announced that there were no plans to sell off or break up any parts of the group.

What’s going to happen

With shares falling with each new development, shareholders are predictably unimpressed. According to The Sunday Times, a rebellion is mounting and at least three of Close’s ten biggest shareholders have called for Keogh to be removed. One proposal is that the recently appointed finance chief Jonathan Howell be promoted to the top job. Howell joined Close just one month ago after 11 years at the London Stock Exchange.

If shareholders get their way, Howell faces a number of challenges in returning the bank to a state of health. The failed takeovers have taken their toll on finances as well as on sentiment - Close spent about £5.5m on advisory fees for the abortive deals. Pre-tax profits aren’t exactly a source of inspiration either, with first half profits down 29%.

Howell will also have to take swift action to prevent the departure of key senior staff members, many of whom would have received bonuses if potential suitors had not been sent packing. The company recently launched an employee incentive scheme but whether this will be enough to curtail defections remains to be seen.

If the coup is successful, Howell is looking at one of the fastest promotions from FD to CEO ever. If, on the other hand, the coup is unsuccessful, he may find himself in a very precarious predicament indeed.

Being offside with the boss just one month into a new job is not an enviable position for anyone, and when the dust settles, there may only be room for one of them.