Davy, Ireland’s largest securities firm, is poised to become the Irish Stock Exchange’s biggest shareholder under plans which will trigger a 26 million euros ($34.5 million) windfall for six members of the 220year-old market, people with knowledge of the matter said.
Royal Bank of Scotland Group Plc (RBS) will be paid to waive its claim to a stake in the exchange as it becomes a private company, said the people, who asked not to be identified as the talks are private. The ISE will have five owners, each with minority stakes, once the plan is finalized, the people said.
The Dublin-based ISE, a branch of the London Stock Exchange until 1995, has missed out on a wave of mergers and acquisitions in the industry in the past decade. The plan comes about seven years after guarantor members first began to explore in detail how to release its cash reserves, which remain tied up under its current structure, according to the people.
The ISE posted a 35 percent increase in pretax profit to 6.3 million euros in 2012.
The accord between the companies comes as the liquidator of Dublin-based Bloxham, the securities firm forced to cease trading last year by the central bank, challenges the ISE’s decision to remove it as a guarantor member. Bloxham valued its interest in the exchange at 6.3 million euros in court filings last year.
Goodbody Stockbrokers, owned by Kerry, Ireland-based Fexco Holdings, Investec Plc (INVP), Cantor Fitzgerald LP and Campbell O’Connor & Co. will be the other shareholders under the accord, one of the people said.
Officials from the Irish Stock Exchange, Goodbody, Investec, Cantor Fitzgerald and Campbell O’Connor declined to comment. Spokesmen for RBS, Davy and Bloxham’s liquidator said they weren’t immediately in a position to comment.
The allocation of shares each firm will receive in the exchange will be linked to the amount of trades they route through the exchange, according to the people.
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