Cash-rich Japanese bank Nomura is believed to be in talks with small cap stockbroker Collins Stewart, while Australian bank Macquarie and Israeli multi-national Delek Capital, a subsidiary of Israeli conglomerate Delek, are also understood to have shown an interest in acquiring the broker.
Collins Stewart said on Wednesday that it had received a preliminary approach, but did not name the potential suitor. However, Nomura is being tipped as the company that triggered the formal announcement and reports suggest the pair are in talks.
Both Nomura and Collins Stewart refused to comment on “market speculation”.
Nomura, which reportedly held talks with Collins Stewart in December last year, has previously made it known that it is keen to boost its international revenues.
Collins Stewart, which operates in stock broking, capital raising, corporate advisory and wealth management, is the only British mid-cap broker that has a foothold in Europe, North America and Asia and would give the Japanese bank an entry into the small cap market.
Meanwhile, Macquarie has also expressed an interest in building up a London-based broking business in a bid to expand its international assets.
The bid interest in Collins Stewart has reignited speculation that the City’s small cap brokers are headed for a period of consolidation. All are being squeezed by the slowdown in the growth companies’ market as IPOs, traditionally the biggest earner for many advisers, have ground to a near halt.
The lack of deals being executed has forced the London Stock Exchange, which runs the Aim market for smaller companies, to adopt a more flexible approach to allow nomads to retain their status as advisers.
Under the current rules nomads, which bring companies to the Aim market and then are responsible for making sure they follow the rules, must complete a certain number of qualifying deals.