Collins Stewart sells out to Canaccord

There is to be more consolidation in the financial services sector with Canadian giant Canaccord winning the hand of UK stockbroker Collins Stewart Hawkpoint.

In a deal that values the UK firm at £255.3m, Canaccord will be offering 57.6p in cash and 0.072607 Canaccord shares for every Collins Stewart share held.

Based on a closing price of C$8.50 for Canaccord on the day before the agreed bid was announced, the terms value each Collins Stewart share at 96p, based on an exchange rate of C$1.6072 to the pound.

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Shares in Collins Stewart shot up 38p to 88.5p on the announcement.

Collins Stewart shareholders will also be entitled to receive a second interim dividend of 2.6p per share, in lieu of a final dividend.

The Collins Stewart directors are recommending acceptance of the Canaccord offer. The Canadian company has received irrevocable undertakings to accept the offer in respect of around 10.7% of the existing issued ordinary share capital of Collins Stewart.

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