ADOW has been cast over fast-growing stockbroker Astaire’s latest acquisition, after the firm yesterday revealed it had discovered a yawning hole in the finances of its retail subsidiary Rowan Dartington.
Astaire, which was renamed last year after Evolve Capital’s ambitious chief Edward Vandyk took over Blue Oar Securities, said it had become aware of up to £1.4m of “potentially irrecoverable debtor balances” during an audit of Rowan Dartington.
Astaire’s shares were suspended on Aim following disclosure of the balance sheet black hole, which it said largely pre-dated Evolve’s acquisition of Astaire.
Astaire said its own resources would be sufficient to cover any deficiency in Rowan Dartington’s regulatory capital if the debts turn out to be irrecoverable. But the oversight will have more far-reaching consequences for its latest takeover bid for Hoodless Brennan, since projections for the enlarged group are likely to show that resources are insufficient for an acquisition under the existing offer terms.
Investors representing over 80 per cent of Hoodless shares have already accepted the offer, though they will now be given the chance to revoke those acceptances.