Sat, 09 Feb 2013 | ADMINISTRATION
Seymour Pierce, one of the oldest brokers in the City of London, has been rescued in a pre-pack administration, just hours after Grant Thornton were appointed as administrators on Friday.
Cantor Fitzgerald, the investment bank, has stepped in to pay an undisclosed price for the 130-year-old broking business which advises over 70 companies and headed by 16 per cent shareholder Keith Harris.
Seymour Pierce was taken private in 2003 by a consortium led by Keith Harris, the then-executive chairman, and Alchemy Partners, for £7.35m. Alchemy exited in 2010, selling its 29.9 per cent stake at a profit to the Seymour Pierce employee benefit trust. Financier Nigel Wray resigned from the board in May last year, though he still owned 6.7 per cent of the shares at the end.
What may be good news for Cantor Fitzgerald and staff of Seymour Pierce, is certainly bad news for creditors that will now have no chance of recouping their £3m to £4m of debts. Before Seymour Pierce entered formal insolvency, it had already prearranged under a pre-pack deal for its assets to be transferred to Cantor Fitzgerald.
David Dunkley, of Grant Thornton, commented, "Seymour Pierce has struggled financially in recent years, with problems reflective of the mid-market stockbroking sector, with corporate finance mandates difficult to execute and falling secondary commission in its target market".
Dunkley said that the well-known Seymour Pierce brand would be maintained by Cantor Fitzgerald who would give the broker the financial resources to stabilise itself.
The distressed business acquisition will give Cantor a strong platform to expand into the UK SME market for corporate finance and advisory services in sectors that include property, healthcare, oil & gas, metals & mining and life sciences.
Cantor Fitzgerald has been granted temporary ‘nomad’ status by the London Stock Exchange.
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