Weak dollar tempts Collins Stewart into possible spree
Collins Stewart, the British investment bank, is preparing for a possible acquisitions spree after the credit crunch forced down company valuations in the United States and following the success of its split from the interdealer broker Tullett Prebon.
Joel Plasco, the chief executive, told The Times that Collins Stewart would be interested in buying an investment banking business or US asset manager. “We are looking at a lot of things,” he said. “The US is an interesting space. The dollar is weak and valuations have fallen, for obvious reasons. We already have a foothold in the US.”
Mr Plasco said that there were “serious opportunities” in Britain, most notably in wealth management. He said that the firm, which bought Hawkpoint, the corporate finance boutique, last year, was prepared potentially to chase a bigger rival.
“We had £142 million of cash on our balance sheet at year-end, but it is more a question of: what is the price? If we find the right opportunity and we think it is in the interests of our shareholders, then we can consider most things,” he said.
Mr Plasco confirmed that Collins Stewart had been interested in buying Winterflood, the Close Brothers-owned broker that was circled this year by Blackstone, the private equity group, as well as Cenkos, the stockbroker founded by Andy Stewart, who co-founded Collins Stewart. Mr Plasco said that nothing had been formally discussed with Blackstone. Close eventually shook off takeover interest.
Collins Stewart, the leading fundraiser on the London Stock Exchange’s junior AIM market, reported a 29 per cent increase in annual pre-tax profits to £79 million, on a 46 per cent jump in revenues to £233.9 million. The securities unit’s revenues fell by 8 per cent in the year to the end of December, but operating profits grew by 35.8 per cent on the back of a strong performance in Europe. Operating profits at Hawkpoint rose by more than a fifth. Shares fell 9p to 122p as Collins Stewart gave warning that markets could stay depressed for as long as two years.
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