Seymour Pierce is in advanced merger talks with a US financial group which could transform one of the City’s top independent stockbrokers into a New York-listed investment bank and insurer worth more than $600m.
Gerova Financial Group, a New York Stock Exchange-quoted reinsurer, approached Seymour Pierce last month about combining the two groups, said people familiar with the talks.
The deal, which could be announced this week, would see the City broker reverse into Gerova to create a US-listed company named Seymour Pierce Inc, with businesses in investment banking, asset management and insurance.
Keith Harris, the Seymour Pierce chairman known for advising on football-related deals such as Roman Abramovich’s acquisition of Chelsea FC, will be installed at the head of the newly created company.
Under Mr Harris, the former chief of HSBC’s investment banking division and a chairman of the Football League, Seymour Pierce has grown into the largest broker on London’s Alternative Investment Market by clients since it was taken private in 2003.
The combination is expected to value Seymour Pierce at about £40m, a significant premium on the £7.5m paid by the private equity group Alchemy Partners and Mr Harris.
Mr Harris purchased Alchemy Partners’ 29.9 per cent holding this year for an undisclosed sum.
The merger, expected to be paid for in Gerova shares, is subject to the approval of US and UK regulators. By achieving a public listing, Seymour Pierce would be able to use its shares as currency to fund further acquisitions of London’s smaller stockbrokers.
Seymour Pierce has advised on several recent high-profile deals, including the flotation of Super Group, ranked as one of the best-performing initial public offerings in London in 2010, and ENRC’s £584m acquisition of Central African Mining last year.
Mr Harris, a Manchester United fan, is a member of the Red Knights consortium of financiers that wanted to buy the club from the Glazer family.
This year Gerova, a Bermuda-based diversified financial services group with investments in reinsurance and asset management, moved from New York’s Amex exchange for smaller companies to the New York Stock Exchange.
As part of the plans, which were first reported by Sky News, Gerova plans to acquire Ticonderoga Securities, an independent US broker dealer chaired by Joel Plasco, former Collins Stewart chief executive.
Mr Plasco is expected to head the new group’s investment banking arm. Seymour Pierce and Ticonderoga Securities declined to comment, while Gerova could not be contacted.
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