City brokers Finncap and Cenkos Securities to merge in all-share deal
Rival brokers Finncap and Cenkos Securities are reportedly in advanced talks to merge in an all-share deal that could be announced as soon as this morning.
If it goes ahead, the tie-up, first reported by Sky News’ Mark Kleinman late last night, could create the City’s biggest dedicated investment bank for small-cap growth companies.
The merger comes amid a challenging backdrop for City brokers, with a widespread slump in capital markets hammering profits throughout the sector.
Cenkos recently reported a £2.24m loss for the full-year, down from a £3.4m profit a year ago, while Finncap swung to a £2.59m half-year loss in December as flotations dried up.
The share price of both London-listed brokers have suffered accordingly, with shares in Finncap and Cenkos falling 59 per cent and 49 per cent over the last year respectively.
Finncap, with a market capitalisation of £21m, will acquire Cenkos Securities, worth £22m, Sky News understands.
The news comes months after fellow City broker Panmure Gordon abandoned a bid for Finncap due to an inability to reach a price agreement.
Finncap and Cenkos Securities were not immediately available for comment when contacted by CityAM