By Caroline Merrell
Appeared in The Times on 25 September 2000
COLLINS STEWART, the stockbroker that bought itself out of the Singer & Friedlander merchant bank five months ago for £122 million, is to float at the end of this month with a value estimated at £250 million.The flotation, which is to be accompanied by a £70 million share placing, values the shareholding of staff and management at £120 million, an increase of £46 million since the management buyout (MBO) in May.
Under the terms of the listing, the stockbroker's employees, who will continue to hold nearly 50 per cent of the shares, will not be able to sell for at least two years. Institutions that also stand to gain from the flotation include CVC Capital Partners, Parallel Ventures and Bank of Scotland - the backers of the buyout.
The chief executive of Collins Stewart is Terry Smith, the former BZW banking analyst who caused a furore by putting a sell notice on Barclays, BZW's parent company. His own stake in Collins Stewart is estimated to worth £20 million on paper.
Collins Stewart is to use the money raised from the share placing to pay off £50 million of a £75 million debt to Singer & Friedlander. The remaining cash will be used to develop an Internet share-evaluation system called Quest.
Mr Smith said: "The flotation of the group following the MBO will enable us to offer equity incentivisation, which is key to ensuring that the staff's interests are aligned with those of our shareholders."
As well as providing institutional stockbroking, Collins Stewart offers corporate finance to smaller companies and has a fund management operation with about £681million under management.
Mr Smith said that the broker was planning to expand its investment management activities.
Collins Stewart, which was part of Singer & Friedlander for nine years, has reported profits for the six months to June 30 of £17.8 million on £50.1 million turnover.
© The Times