Collins Stewart profits slump as bidders circle
Profits at Collins Stewart, the broker, are expected to have more than halved, according to analysts awaiting the group’s interim results tomorrow.
Collins Stewart, which is in takeover discussions, could report profits as low as £25m, from £52m in the first half of 2007.
The credit crunch has hit small cap brokers hard, with many battening down the hatches for a period of consolidation.
Last week, Collins Stewart was forced by the Takeover Panel to admit that it had received a preliminary bid approach, with Japanese investment bank Nomura thought to be the suitor.
Nomura is known to be looking for a way to bolster international revenues and enter the small cap market.
Collins Stewart, chaired by leading City of London figure Terry Smith, would be an ideal candidate, as the only British mid-cap broker with a foothold in Europe, North America and Asia.
Other parties rumoured to be taking an interest include Indian financial services group JM Financial, Australia’s Macquarie Bank, Iceland’s Straumur and Indian brokerage Religare.
Israeli multi-national Delek Capital, a subsidiary of the conglomerate Delek, has also been eyeing a move for the broker, a spokesman revealed yesterday.
He said: “There was a preliminary meeting a few weeks ago, but since then there has been no development.”