According to Bloomberg, Canaccord is looking to expand its UK brokerage and wealth management business and has been in talks with Collins Stewart since September.
In the deal, shareholders in Collins Stewart will receive 96 pence per share, including 57.6 pence in cash and 0.072607 of a share in Toronto-based Canaccord.
The offer is nearly double Collins Stewart’s closing share price yesterday of a little above 50 pence, close to a three-year low and valuing the company at around £125m. Its share price rose to 87.8 pence in London during trading today (15 Dec).
At the close of business on the Toronto Stock Exchange yesterday, Canaccord’s share price was C$8.5 ($8.20).
This is the third acquisition by Canaccord this year, having taken over The Balloch Group in China in January and a 50% share in BGF Capital Group, giving it a presence in Australia and Hong Kong.
Last year it built on its investment banking business with a £180m cash and stock takeover of Genuity Capital Markets.
Collins Stewart has 850 staff in the UK, with a large operation in the Channel Islands, Singapore and the US, including a securities business that would link neatly with Canaccord’s New York operation.
Canaccord is reported to have as much as £450m in cash on its balance sheet, hence its ability to follow an aggressive acquisition strategy.
Tim Ingram, chairman of Collins Stewart Hawkpoint, said: “The combination of Canaccord and Collins Stewart Hawkpoint makes strong commercial and strategic sense, greatly strengthening the enlarged group’s capital markets, advisory and wealth management presence in North America, Europe and Asia.
“The offer price represents a substantial premium over the current Collins Stewart Hawkpoint market price.”
Paul Reynolds, chief executive of Canaccord, said: “The acquisition of Collins Stewart Hawkpoint will be a transformational expansion of our business and will firmly position Canaccord as a leading global independent investment bank.
"When the transaction closes, Canaccord will have operations in 12 countries and capabilities to list companies on ten stock exchanges.”
