Monday 23 October 2017

Internal team among bidders circling broker Merrion Capital

Joe Brennan

A strategic review at Merrion Capital has smoked out a number of takeover approaches, including one from an internal team led by Shane Nolan, head of its private clients arm, according to industry sources.

It is understood the overtures have been made for parts and all of the brokerage, which was set up 11 years ago when a team of traders and analysts from NCB Stockbrokers decided set out on their own.

The review of the business came as John Conroy (right), who ran Merrion from the start, decided at the end of April to step down and take charge of the group's corporate finance division. Michael Hodson, the firm's head of finance since 2000, has been acting managing director since then.

Speculation in Dublin stockbroking circles yesterday suggested Mr Nolan was mainly interested in mounting a bid for his own department and that Mr Conroy, who has taken a 50pc stake in the corporate finance division, could be involved.

However, it is believed that there is also credible interest from outside the entire firm. Calls to Merrion Capital by the Irish Independent were not returned.

A deal is likely to kickstart long-awaited consolidation in the sector, which has been grappling in recent years with tumbling Irish stock prices, contraction of business in the previously high-flying private clients departments, and dearth of corporate finance deals.

Goodbody Stockbrokers is expected to be put on the blocks by its owner, Allied Irish Banks, as Brussels delivers its verdict on the bank's restructuring plan over the coming months.

Elsewhere, NCB Stockbrokers is expected to play a role in consolidation, particularly as management reviews its options regarding the troubled Quinn Group's 24pc stake in the firm.


Accounts for 2008 for Merrion Capital show it made a pre-tax profit of €8m, though recent reports indicate that the figure declined to €6m last year.

The group had €20.6m of cash in the bank at the time, though industry sources suggested it was now substantially higher.

Senior executives at Merrion, which employs about 100 people, pulled off a major coup in late 2008 in a management-led buyback of the company from Landsbanki for just €30m, as the Icelandic bank imploded.

Landsbanki had paid €90m, acquiring 84pc of Merrion, up until 2007 and was due to acquire the remaining 16pc in 2009. That was before the Icelandic financial system went into freefall.

Merrion acquired Oppenheim Investment Managers, where Joe O'Dwyer is managing director and chief investment officer, three years ago. Last year, it backed Worldspreads co-founder Brian O'Neill in buying the profitable Irish division of the firm in a €9m deal that left Merrion with a 40pc stake.

Irish Independent

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