US boutique investment bank Gleacher enters merger talks

City A.M. Reporter
GLEACHER & CO, the US boutique investment bank, yesterday said it was in talks over a possible merger with a fellow investment bank, which is believed to be Sterne Agee Group.

The news comes less than two months after Gleacher suspended a search for a buyer, adding to uncertainty that has already cost the investment bank clients and employees. The bank had broken off talks with a separate company, Stifel Financial, last year, after Stifel failed to come up with an offer that Gleacher’s board considered acceptable.

Sterne Agee, an Alabama-based bank founded in 1901, manages around $17bn (£11bn) in assets.

Shares in Gleacher spiked as much as 30 per cent on the Nasdaq index yesterday, but almost immediately fell back down, closing just under five per cent up. The stock has lost 13 per cent of its value since the beginning of the year.

The bank has been in turmoil for some years, continuing to post losses and admitting that customers have stopped working with them while others have reduced their dealings.

It has responded by cutting staff, and talk of a merger yesterday was prefaced by more layoffs. The bank said it would close its fixed-income business, affecting 160 employees in mortgage-backed securities and rates and credit products.

Neither Gleacher nor Sterne Agee would comment on suggestions of a merger between the two.