Goodbody Stockbrokers prepares to unveil Chinese tie-up next week

Goodbody Stockbrokers and its majority owner Fexco are set to unveil the terms of the securities firm's planned takeover by a Chinese group next week in a deal that is expected to be worth about €150 million.

While news of the tie-up talks first emerged in February, negotiations have dragged on for longer than expected, with both sides said to be keen to ensure that the final terms of an agreement would be sufficient to secure regulatory approval.

Roy Barrett, who has led Goodbody for more than two decades, will remain at the helm following a takeover by Chinese government-backed Zhong Ze Culture Investment Holdings. Mr Barrett told the firm's 300-plus staff earlier this year that a takeover would not involve job cuts or a change in strategy.

Kerry-based financial services company Fexco, founded and led by executive chairman Brian McCarthy, bought 75 per cent of Goodbody seven years ago from AIB in a deal worth €24 million. However, management in the stockbroking and wealth-management company subsequently doubled their combined holding to 49 per cent under an incentive scheme tied to the original deal.

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The Irish securities industry has been a focus of merger and acquisition activity and speculation in recent times, with Cantor Fitzgerald's Irish unit entering a deal in May to buy Merrion Capital for up to €18 million.

AIB had also been involved in exclusive talks earlier this year to re-enter the sector through a purchase of Investec’s Irish operation. However, those negotiations failed to deliver an agreement, with one of the sticking points believed to have been the fact that bailed-out Irish banks continue effectively to be banned from paying bonuses.

The imminent Goodbody deal comes months after the company and four other Irish brokers shared a €158 million windfall from the sale of the Irish Stock Exchange to Euronext, operator of the Paris, Amsterdam, Lisbon and Brussels bourses.