Rumours swirl on potential sale rumours for City broker Liberum

Rumours of ongoing discussions between City broker Liberum and Australian bank Macquarie surfaced today, reported to be in the region of around £100m.

However in an internal memo circulated among Liberum staff, seen by City A.M., chief executive Shane Le Prevost put a dampener on the reports.

“In the last 12 months we have received a number of approaches,” wrote Le Prevost.

“We are not in any current discussions and continue to believe that we have a significant opportunity to grow our business organically.”

The acquisition, first reported by Financial News, could see Liberum rescued by Macquarie as smaller industry brokers have begun to feel the squeeze of tightened regulations such as Mifid II.

Liberum was one of many industry research firms in the City rumoured to be exploring sale options, including fellow broker Peel Hunt which was reported to be in discussions with Banco Santander in September. Peel Hunt later said it was not up for sale.

Others, such as London-listed firm CMC Markets which also runs a spread betting platform, have seen profits tumble as regulation increased ahead of the UK's exit from the European Union.

Mifid II, which became effective on 3 January, forced investors to pay firms directly for research instead of being lumped in with wider investment services.

Liberum reported profits before tax of £6.4m last year, and revenue of £50.6m according to filings on Companies House. It has around 40 analysts employed at its Moorgate base, while Macquarie's London division is nearer to 30.

Macquarie and Liberum both declined to comment on the discussions.