Patersons and Tolhurst broking businesses to merge
Patersons Securities has struck an in-principle agreement with the stockbroking arm of the Tolhurst Group that will see Tolhurst sell its broking business and brand names to Patersons.
The Tolhurst Group is a listed company. Tolhurst chairman David Browne said the proposed transaction would allow Tolhurst clients, staff and shareholders to be part of a “strong, expanded debt free firm going forward”.
A statement from Patersons said the expanded group will operate with “a strong balance sheet, no debt and negligible intangibles”.
The transaction is subject to the normal legal and regulatory approval. A statement from Patersons said major shareholders representing more than 50 per cent of the issued capital of Tolhurst have indicated they will support the transaction.
If approved, the new business will trade as Patersons Securities and will have more than 400 employees and 370,000 clients.
When the purchase is completed, Patersons will assume responsibility for property leases related to the Tolhurst stockbroking business. Tolhurst will then have the opportunity to subscribe for new shares in Patersons representing up to 31 per cent of the merged group’s expanded capital, an amount representative of the share of revenue that Tolhurst is contributing.
The subscription price of new shares in Patersons will be determined by the net asset value of Patersons at the time of completion. Patersons will also be granted options to acquire 15 per cent of Tolhurst’s total issued capital.
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