US Broker Swoops For Charles Stanley Division

One of the London Stock Exchange (Other OTC: LDNXF - news) 's oldest companies is close to offloading its securities arm in a move that will underline growing pressures on an industry increasingly squeezed by regulatory reform.

Sky News has learnt that Charles Stanley (LSE: CAY.L - news) is in advanced talks with an American buyer of its corporate finance business, which employs approximately 35 people in areas such as equity research.

People close to the situation said that the likeliest buyer of Charles Stanley Securities was Stifel Financial (NYSE: SF - news) , a US-based company which already has a presence in the City through its ownership of broking businesses such as KBW and Oriel Securities.

Cantor Fitzgerald was also said to be a possible bidder, while Panmure Gordon is said to have made an offer for the business in recent days.

The value of the deal is unclear, although sources said it was likely to be worth several million pounds.

One insider said an agreement could be announced as early as Tuesday.

Charles Stanley's securities business has struggled amid intense competition among small and mid-cap brokers, while other broader asset management groups, such as Brewin Dolphin (LSE: BRW.L - news) , have also disposed of their corporate finance divisions.

In January, Charles Stanley Group, which is one of the London Stock Exchange's oldest listed companies, updated the City on its performance, saying: "All divisions are ahead of their prior year comparative with the exception of Charles Stanley Securities which has experienced a lower level of corporate finance activity during the current year."

In December, Charles Stanley Group appointed Paul Abberley, a former head of Aviva Investors, as its chief executive, followed weeks later by the arrival of Ben Money-Coutts as interim chief financial officer.

"Following these appointments the board is conducting a review of its operations," the company said.

Mr Abberley replaced Sir David Howard, who stepped down to comply with European Union regulations which require the separation of the roles of chief executive and chairman.

The group offers wealth management and private client services, and employs more than 450 people in 31 offices around the UK.

Charles Stanley declined to comment on the sale of its securities unit, while Stifel could not be reached for comment.