Canaccord in £253m Collins Stewart deal

SHARES in finance group Collins Stewart Hawkpoint rocketed more than 75 per cent yesterday after it agreed a sale of the business to Canaccord Financial for £253.3m.

The 96p per share cash and shares offer put the bid at a 90 per cent premium to Collins Stewart’s share price on Wednesday, and shareholders will also still be paid the 2.6p dividend planned for 31 January.

Canadian group Canaccord had been openly seeking a City acquisition and approached Collins Stewart just months after walking away from acrimonious talks with Evolution Group when Evolution decided to recommend a rival offer from Investec.

Canaccord had built up a war chest to acquire a London-based broker and wealth manager to expand its large operations in Canada and Collins Stewart, with its brokerage, Hawkpoint M&A advisory business and £8.1bn assets under management, combines the assets it sought.

Canaccord’s chief executive Paul Reynolds said it would be a “transformative expansion”.

“When the transaction closes, Canaccord will have operations in twelve countries and capabilities to list companies on ten stock exchanges,” he added.

Sources close to Collins Stewart told City A.M. Canaccord’s approach was unsolicited and the high price offered had prompted the decision to sell.

The new group will be listed in Toronto and London, with Collins Stewart’s London listing to be transferred from the Aim to main market.

Collins Stewart’s major institutional shareholders welcomed the deal, and Aberforth, its largest investor with a 10.7 per cent stake, said it would vote for the deal. Others holding 7.9 per cent also gave their support.