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Shore Capital in talks to take over rival City stockbroker Stockdale Securities

Published: 09:25 28 Jan 2019 GMT

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Any deal would not be the first, or likely the last, in the sector

Shore Capital has confirmed it is in talks to acquire rival City stockbroker Stockdale Securities, as the wave of deal-making sweeping the sector continues.

Reports over the weekend suggested that a “multi-million-pound” deal could be agreed within a few weeks.

Shore, co-founded by Tory party donor and Brexiteer Howard Shore, said today: “The company confirms that Shore Capital Markets is in discussions regarding a potential acquisition of Stockdale Securities Limited.

“There can be no certainty that a transaction will be concluded and a further announcement, as appropriate, will be made in due course.”

Should it go ahead, the merger would bring together two of the City’s leading small-cap research departments and create the second-largest broker to AIM clients, behind finnCap.

READ: SP Angel in merger talks with Northland

Any tie-up would not be the first, or likely the last, among London’s brokers. Spanish banking giant Santander was rumoured to be interested in Peel Hunt towards the back end of 2018, while Aussie investment bank Macquarie was also reported to mulling a bid for Liberum.

Cenkos Securities is also expected to take part in the round of consolidation, as pressure grows from activist investor Crystal Amber.

Among the completed deals, finnCap merged with Cavendish Corporate Finance and Northland and SP Angel are in the process of completing their tie-up.

The furious spate of deal-making and rumours has been largely been brought on by last year’s introduction of MIFID II – a Europe-wide set of regulations which has forced brokers to charge clients separately for research and trading activities.

The changes have triggered higher costs and restrictions on services that firms can provide. Brexit uncertainty has also dented the number of companies joining AIM.

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