Nomura makes play for broker Collins Stewart
JAPANESE banking giant Nomura is to trigger a further shake-up of the City’s stockbrokers today by confirming it has approached Collins Stewart about a possible takeover.
It is understood Nomura has held early-stage talks with representatives from Collins Stewart, the FTSE 250 broking and corporate finance group led by pugnacious chairman Terry Smith and chief executive Joel Plasco.
Contact was initiated through Hawkpoint, the boutique bank Collins Stewart bought last year, with the most recent discussions taking place at Nomura’s Regent’s Park offices in London last Tuesday.
Collins Stewart has a stock market value of £443million, but any bid would probably need to be pitched at a minimum of £750million.
Speculation that a Japanese bank was chasing Collins Stewart swept the City on Friday, boosting its share price more than 8 per cent.
In another twist, Collins Stewart was touted as a possible bidder for UK investment house Close Brothers, which announced just before Friday’s market close that it had received “a number of approaches”. Collins Stewart is understood to be keen on Close’s asset management and Winterfloods market-making businesses.
Collins Stewart refused to comment, but an announcement is widely expected today on developments surrounding the latest twist to consolidation of the UK broking industry. Icelandic bank Landsbanki has bought Teather & Greenwood and Bridgewell.
There has been talk recently of possible predatory interest in other UK-listed brokers, including Panmure Gordon and Evolution. “It is unlikely that, with the economic downturn ahead, all these companies will still be here in two years’ time”, said one financial sector observer.
Nomura is thought to want to take advantage of low valuations created by the credit crunch.
Collins Stewart, which demerged a year ago from its sister company Tullet Prebon, has seen its share price fall by one third since January.
Another of Collins Stewart’s attractions is its overseas expansion. It is thought to be considering adding a Singapore office to its presence in India. It also employs more than 100 brokers in New York.