Ord Minnett tapped for exclusive talks at EL&C Baillieu

Street Talk

Stockbroker Ord Minnett is the preferred bidder for Melbourne-based rival EL&C Baillieu.

It is understood Ord Minnett has been tapped for a round of exclusive talks with EL&C Baillieu and its advisers, following an auction run by Deloitte.

Ord Minnett chairman Karl Morris.  Glenn Hunt

Sources said the aim was for Ord Minnett to have a fully formed deal to put to EL&C Baillieu shareholders at a meeting in coming weeks. It would then be up to shareholders to approve the deal.

EL&C Baillieu’s shareholders including Credit Suisse, management and staff, and former staff.

Credit Suisse has a 23.3 per cent stake in the business and is seeking an exit. It is understood some former executives, including ex-corporate finance boss Stephen Macaw, are also keen for the deal to happen.

The existing management and staff’s vote is more likely to be contingent on the terms put forward by Ord Minnett, which is advised by Brisbane-based InterFinancial.

Key business writers and management are expected to be offered Ord Minnett scrip, as a replacement for their EL&C Baillieu shares and to tie them up to their potential new employer.

The exclusive talks, which are expected to last a few weeks, come after Ord Minnett emerged as the most likely acquirer in an auction that also attracted interest from Canaccord Genuity and Kiwi stockbroker Jarden.

Deloitte ran the auction and collected bids in the first half of September.

Since then, Deloitte has gone back to a couple of bidders to clarify their interest, before selecting Ord Minnett for the final stage of negotiations.

Ord Minnett’s talks have been spearheaded by the firm’s chairman, Karl Morris, who is also chairman of NRL club owner Brisbane Broncos Ltd.

Ord Minnett is understood to consider it a good opportunity to bulk up and pinch some of the clients and advisers that have been out of reach, particularly in EL&C Baillieu’s home town of Melbourne. The firm’s corporate business has been riding high in recent months, capitalising on its investor clients’ enthusiasm to trade stocks and corporate clients’ need for fresh capital.

Interested parties were earlier told Baillieu was likely to record $51 million revenue in the 2020 financial year. Its biggest unit by revenue was private wealth ($43.9 million), ahead of institutional equities ($3.9 million) and corporate finance ($2.8 million). Revenue was $46.3 million in the 2019 financial year and $52 million in 2018 and 2017, according to information sent to potential buyers.

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Sarah Thompson has co-edited Street Talk since 2009, specialising in private equity, investment banking, M&A and equity capital markets stories. Prior to that, she spent 10 years in London as a markets and M&A reporter at Bloomberg and Dow Jones. Email Sarah at sarah.thompson@afr.com
Anthony Macdonald co-edits Street Talk, specialising in private equity, investment banking, M&A and equity capital markets. He has 10 years’ experience as a business journalist and worked at PwC, auditing and advising financial services companies. Connect with Anthony on Twitter. Email Anthony at a.macdonald@afr.com

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