Aim adviser Alexander David Securities Group says that it is in talks to acquire broker Hoodless Brennan.
Alexander David is based just down the road from HB in London. Both have private client stock broking activities and HB has an office in Bristol. HB would also take Alexander David into market making.
Astaire Group’s bid for HB lapsed in May because the Aim adviser did not feel it would get approval from the FSA. This was because of accounting problems at Astaire’s Rowan Dartington subsidiary.
Astaire was offering 0.9403p in cash and 4.4665p of convertible loan notes for each Hoodless Brennan share. Fairfax IS valued the convertible loan notes at 55p in the pound and the conversion price was to be 6p per Astaire share. The deal valued HB at £3.61m.
HB’s corporate finance operations were spun off last year and are now known as Allenby Capital. HB still owned 9.9% of Allenby at the time of the Astaire bid and, under certain circumstances, is allowed to increase the stake to 50%.
HB shareholders may prefer cash to shares which would mean a large fundraising. Alexander David also needs to make sure it has enough regulatory capital.
Talks continue for what would be a reverse takeover of Alexander David and any deal is subject to due diligence. At the suspension price of 0.45p a share, Alexander David is valued at £2.25m.
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