Cenkos Securities and finnCap Group, the London-listed brokers, are in superior talks to merge in an all-share deal that can create the City’s greatest devoted funding financial institution serving small-cap progress corporations.
Sky News has learnt that Cenkos and finnCap are near agreeing a tie-up.
An announcement from each corporations is probably going as quickly as Thursday morning.
If confirmed, it should speed up the consolidation amongst London’s smaller broking corporations throughout a difficult interval for capital markets specialists.
Company flotations have been uncommon within the City within the final yr due to financial and market volatility.
The merger of Cenkos and finnCap will come months after Panmure Gordon, the funding financial institution owned by a automobile headed by Bob Diamond, the previous Barclays chief, deserted a bid for finnCap.
The two sides have been unable to agree on a value.
City sources mentioned on Wednesday that the deal would see finnCap buying Cenkos.
The two corporations have nearly an identical market capitalisations of £21m and £22m respectively.
Other particulars of the deal, together with the management of the mixed agency and which model it might use, have been unclear.
Despite their lowly valuations, the deal can be carefully watched within the City by each friends and the corporations’ shoppers.
A slowdown in company exercise has pushed a hunt for enhanced price financial savings amongst brokers, with the prospects for company exercise this yr dampened by the financial backdrop.
FinnCap has endured a troublesome interval, parting firm with Sam Smith, its chief govt and one in all comparatively few feminine City bosses, final summer season.
Other broking corporations are anticipated to take part in business consolidation, together with WH Ireland, which is underneath siege from an activist shareholder.
A finnCap spokesman declined to remark, whereas Cenkos couldn’t be reached.
Source: information.sky.com”