Monday 22 January 2018

NCB and Davy seen as takeover targets as Cantor Fitzgerald plans expansion

Donal O'Donovan

THERE was a rare piece of good news for Dublin's pin-striped stockbrokers and bond dealers last night after US-based Cantor Fitzgerald was rumoured to be buying an Irish brokerage business.

A source close to the situation confirmed that the investment bank and bond dealing firm is looking at potential Irish deals. However, the source said the move is at an early stage and no announcement is imminent.

A spokesman for Cantor Fitzgerald would not comment.

The speculation arises as the US group rolls out plans to double its European employee numbers to 400 over the next two years. The focus on Ireland is understood to be opportunistic. It comes after Kerry-based Fexco bought Goodbody's Stockbrokers for just €24m in September.

That deal put the spotlight on the sharp fall in the valuation of Irish financial institutions.

Cantor Fitzgerald specialises in bond brokerage and trading and is a primary dealer in debt issued by the US government. It is also active in share dealing and investment banking.

While it is understood to have run the rule over a number of institutions, speculation in Dublin is likely to focus on NCB Stockbrokers and Davy as prime candidates.

"I hope it's us," was the view of one Irish debt dealer who was aware of the rumours.

NCB is 25pc owned by Sean Quinn, and the institutions picking through the Quinn empire are certain to be looking for a buyer for that stake. The rest of the business is owned by management and staff after a €20m buyout from former parent Ulster Bank in 2003.

Davy Stockbrokers -- a primary dealer for Irish government bonds -- could also be a takeover target.

It is struggling under the burden of debts incurred in 2006 to finance its acquisition from Bank of Ireland for €316m.

As well as the independent brokerage houses, Cantor Fitzgerald could look at buying the capital markets division of one of the Irish banks.

The banks have been told to shrink their balance sheets as part of the planned restructuring of the sector.

In addition to attractive pricing, an Irish acquisition would fit the group's objective of rolling out a European network selling bonds and shares to middle class investors and acting as a financing broker for medium size companies.

An Irish acquisition would close a remarkable circle for Cantor Fitzgerald, which was co-founded by Irish born John Fitzgerald in New York in 1945. In Britain it operates UK spread betting specialist Cantor Index.

Irish Independent

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