Top pawnbrokers hold £230m merger talks
Britain's only two stock market-listed pawnbrokers, Albemarle & Bond and H&T, have had initial merger discussions that could result in the UK's largest pawnbroking business, valued at more than £230m.
Deal: H&T, pictured here, could merge with A&B to create a £230m business
Including planned store openings, a combined group would have 252 outlets, topping the 250 of The Money Shop, owned by US-listed Dollar Financial Corp.
It is understood that talks are at an early stage and no advisers have been appointed. A move would need the backing of shareholders and both boards.
H&T's largest shareholder is fund manager Artemis Investment Management with 16.1%, while directors own 3.9%.
A&B's largest shareholder is US pawnbroking giant Ezcorp International with 29%, while management own just under 10%.
H&T chief executive John Nichols and A&B operations director David Page both sit on the board of the National Pawnbrokers Association.
Both companies have seen rapid growth during the recession, boosted by a surge in the price of gold, which has been more than $1,000 (£608) an ounce, and customers who have limited access to banking and finance services.
Nichols and A&B's new chief executive Barry Stevenson declined to comment on talks, but both could see benefits in a merger.
They stressed that market conditions were ripe for consolidation and outlined their plans to acquire independent businesses.
Nichols said: 'We plan to open a further 12 pawnbroking stores this year, bringing our total to 122.
'We also have 57 gold stores and we are looking to increase this to 77 this year. The company is witnessing a boom in gold prices and we are looking to take advantage of this.'
Stevenson said A&B was well financed to handle a sizeable acquisition. 'We are always on the lookout for an acquisition that fits in with our rollout programme,' he said. In 2007 the company acquired specialist pawnbroker Herbert Brown for £30m.
Berkeley Credit & Finance, which operates pawnbroking shops in London, is understood to have held talks over a possible sale. Other independent businesses include Fish Brothers, TGS Pawnbrokers, Chain Reaction, Mallard Pawnbroker and The Old English Pawnbroking Company. A&B shares closed last week at 241p, valuing the business at £134m, while H&T's shares ended at 287.5p, valuing it at £102m.
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