Monday 18 December 2017

Merrion - Cantor Fitzgerald contacts not signal of deal, insiders insist

Cantor Fitzgerald’s Ronan Reid
Cantor Fitzgerald’s Ronan Reid
Donal O'Donovan

Donal O'Donovan

High-level contacts between senior figures at Cantor Fitzgerald and Merrion Capital do not mean a deal is imminent, insiders have told the Irish Independent.

US-owned Cantor Fitzgerald lost out three years ago in a takeover battle for Merrion to a bid led by a group of the firm's own management.

The Irish Independent has learned that senior managers at both firms have more recently discussed the potential for consolidation in the sector as a response to rising regulatory costs, but that did not advance to specific merger talks.

If detailed discussions that could lead to a takeover of Merrion by bigger rival Cantor Fitzgerald developed it would have to be notified to both firms' boards and to the Central Bank, as regulator, and it is understood that has not happened.

A senior figure at Merrion said it is not currently engaged in talks that could lead to a sale.

Cantor Fitzgerald Ireland is known to be targeting growth in Ireland to build scale, after the US brokerage acquired the former Dolmen Securities in 2012.

The Dublin-based business is led by Ronan Reid and recently completed an Irish bolt-on acquisition of L&P Group, an advisory service for charities, trusts, not-for-profit organisations and religious orders.

That followed a takeover last year of the management of thousands of former Rabo Direct investment accounts after the Dutch bank pulled out of the sector here.

An inside source said Cantor Fitzgerald would look at buying Merrion if came up for sale. The firm has recently hired a number of former Merrion staff.

It would likely face competition from Investec and Goodbody Stockbrokers, as well as potentially from Bank of Ireland, which said this month that it is targeting growth through acquisition in the wealth management sector.

However, Merrion Capital, led by CEO Patrick O'Neill and majority-owned by staff, is understood to see itself as a consolidator in the wealth management sector in its own right.

The firm has recently rebranded its main customer arm as Merrion Private as part of a shift from pure stockbroking to wealth management and is understood to be eyeing bolt-on deals of its own in that segment of the market, where it already has around €2bn in assets under management.

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