Goodbody dismisses Investec takeover speculation

Fexco took control of firm in 2011 with Goodbody keeping a 25% holding, now up at 49%

Roy Barrett, chief executive of Goodbody Stockbrokers: sent an email to staff saying the company was not in takeover talks. Photograph: Eric Luke/The Irish Times

Roy Barrett, chief executive of Goodbody Stockbrokers: sent an email to staff saying the company was not in takeover talks. Photograph: Eric Luke/The Irish Times

 

There is no substance to industry speculation that Goodbody Stockbrokers could be taken over by Investec, Goodbody managing director Roy Barrett has told staff .

Mr Barrett informed staff in an email last month, which didn’t name Investec, that the company was not in takeover talks, as rumours, which surfaced earlier this year in Dublin’s small stockbroking community, peaked with a report that Goodbody could make a “good fit” for Investec.

Kerry-based financial services company Fexco acquired control of Goodbody in January 2011 from AIB, as the bank was selling off non-core assets in the wake of its Government bailout. At the time, Fexco took a 75 per cent stake, leaving staff and management at Goodbody with a 25 per cent holding.

Takeover speculation surfaced in April, according to industry figures, when it emerged that management and staff had almost doubled their stake to 49 per cent, after reaching incentive targets set at the time of the deal. Sources at the time said the value of the firm had more than quadrupled, leaving Fexeco well in the money on its investment.

Staff cuts

Goodbody has since moved to restructure and cut costs by laying off more than 20 employees, particularly in its wealth management business, with a “handful” of additional staff opting for an early-retirement package.

The wealth management industry has had a difficult year globally as rich investors have stuck to the sidelines amid slowing growth in China, volatile stock and commodity prices and, more recently, the UK’s decision to quit the EU.

A management rejig saw Eamonn Glancy, previously head of wealth management, become group chief operating officer. He was replaced by Simon Howley, who was a director at the firm’s corporate finance business.

While corporate finance activity involving Dublin brokers has fallen significantly this year, with initial public offerings all-but drying up, Irish share trading rose 11 per cent in the first half of the year. Goodbody and larger rival Davy have also made inroads in recent years into the stock trading business in the mid-cap segment of the London market.

Goodbody has hired three analysts – John Cronin and Cian Harty from Investec in Dublin, and Colm Lauder from Morgan Stanley Capital International in London – to strengthen its equity research offering for institutional investors.