ORIEL Securities has struck a deal with Canadian bank CIBC that will see the stockbroker take a loan from its larger peer and work together on deals.
Oriel, which had been the subject of months of takeover rumours, said the arrangement builds on an earlier deal to distribute the London-based broker’s research in North America.
“We’ve known them for three or four years, and about a year ago we worked together on getting research into the US. We work in the same building, which helps,” said interim chief executive Simon Bragg.
Bragg said Oriel already had a strong balance sheet, but that the loan for an undisclosed amount “will help us take advantage of working with CIBC”.
“We will be able to work on bigger transactions… it’s giving us a lot more firepower,” he told City A.M. yesterday.
Oriel could work with CIBC, Canada’s fifth-largest bank, on cross-border floats or on larger merger and acquisition advisory world, Bragg added.
Oriel’s arrangement with CIBC has a provision for the latter to convert the loan into a small stake in the stockbroker, though Bragg said yesterday he did not see the company becoming a major investor.
The London stockbroking industry has undergone a wave of consolidation in the wake of the financial crisis, with established names such as Seymour Pierce, Collins Stewart and Hoare Govett disappearing from the Square Mile.
Oriel had been linked to Panmure Gordon, having held several rounds of talks about a tie-up, but without a deal being made.