Top City brokers to merge in pounds 54m deal
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Gerrard & National and King & Shaxson, which have seen their traditional discount house operations virtually consigned to the history books by a change of policy at the Bank of England, are merging in a pounds 53.7m deal.
The two companies hope that the merger will lead to more opportunities in stockbroking and fund management, and said that the deal would also release pounds 25m of capital for investment and future acquisitions.
The combined group will have the largest private client stockbroking business in the UK, bringing together two well-known City broking firms - Gerrard Vivian Gray and Greig Middleton. The combined brokerage will trade as Greig Middleton.
Some cost savings will be made by making up to 100 staff redundant from the new Gerrard Group's money-broking and back-office operations. After the job cuts, the company will employ more than 900 people in its stockbroking arm, 420 in its derivatives broking operations and 30 on the money market side.
"It's a strategic move. The business of Greig Middleton fits very well with the business of Gerrard Vivian Gray. They are both on same back-office system and know each other very well. There's a common culture," said Mike Davies, chief executive of Gerrard & National.
The firms' discount house, or money market operations, will be merged and renamed Gerrard and King and this, in combination with the integration on the stock brokers' back offices, will achieve annualised cost savings of pounds 5m.
Gerrard & National's derivatives broker, GNI, the largest firm on the floor of Liffe, will retain its identity and Mr Davies ruled out job losses, despite slim profit margins in futures trading.
The terms of the merger comprises 17 Gerrard & National ordinary shares for 25 King & Shaxson shares. The deal will give Gerrard & National shareholders a 62.7 per cent stake in the merged business and King & Shaxson's investors a 37.3 per cent shareholding.
The merger accompanied Gerrard & National's interim results, which showed that pre-tax profits had slumped from pounds 12.1m to pounds 6.3m. Shares in Gerrard & National fell to a low for the year of 272p, down 27p. King & Shaxson's shares hit a new high with a 20p rise to 182.5p.
Gerrard & National said its results were hit by the introduction of gilt repos, reduced volatility in foreign exchange and fixed-income markets and narrower margins on Liffe.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments