Shares in Merchant Securities, which bought fellow brokerage John East & Partners in 2007, leapt more than 30 per cent to close at 15p after it said it was in early stage talks with Sanlam. Merchant said Sanlam also bought a 9.7 per cent stake yesterday, buying the shares at 14p apiece, a 22 per cent premium to its closing share price on Tuesday.
Yesterday’s closing price values the business at about £7.7m but Sanlam may pay a further premium to that.
Merchant has more than 30 smaller-cap UK-listed clients as well as a wealth management arm.
Sources close to the firm told City A.M. it had not previously been considered up for sale but the board was pleased with the progress of talks so far.