Collins Stewart is in talks with a foreign suitor that could lead to Britain's biggest independent stockbroker being taken over.
The company said yesterday that discussions were at an "early stage" and that there was no certainty that they would lead to an offer. Analysts said that the approach could be from a sovereign wealth investor with the capital strength and long-term view to extract value from a deal.
The company issued a statement after its share price jumped. Collins Stewart shares closed up 31 per cent at 100p, valuing the company at £247m.
Nomura, Japan's biggest securities house, approached Collins Stewart last year but ended up declaring that it was not interested in buying the company. Terry Smith, Collins Stewart's chairman, has said that he will listen to approaches from serious potential acquirers prepared to pay a decent price.
Mr Smith holds about 3.6 per cent of Collins Stewart's shares. He held talks with a number of prospective bidders in 2006 about selling Collins Stewart's equities business but none came to fruition. Collins Stewart has since been demerged from Tullett Prebon, the inter-dealer broker.
Mr Smith, who is also chief executive of Tullett Prebon, could have a busy end to the summer. Tullett Prebon is in merger talks with GFI, a US inter-dealer broker, in a deal that he has said could be agreed in four-to-six weeks.
Collins Stewart's activities include stockbroking, capital raising, merger advice, corporate broking and fund management. The company warned in May that market conditions would remain challenging this year after the slowdown in new stock market listings hit its capital markets business, which raises funds for companies on the Alternative Investment Market. Revenue fell to £57.6m in the first four months of the year from £73.1m a year earlier, the company said.
Shares of Britain's independent brokers have been battered in recent months amid the market turmoil. Even after yesterday's surge, Collins Stewart's stock had fallen 42 per cent this year.
Collins Stewart said: "The board of Collins Stewart announces that it has received a preliminary approach from a third party which it is considering. This approach is at a very early stage and there can be no certainty that it will lead to an offer being made for the company."Reuse content