WH Ireland to sell capital markets business to Zeus for up to £5m

(Sharecast News) - WH Ireland said on Monday that it has agreed to sell its capital markets business to investment bank Zeus Capital for up to £5m. The key assets being bought include the corporate client contracts of the capital markets division, the employees, the key supplier contracts, the Leeds and Bristol leasehold premises, and the transfer of high net worth clients together with their execution only custody accounts valued at about £600m.

The consideration for the deal comprises an initial cash payment of £1 payable on completion and up to £4,999,999 of deferred consideration to be paid in cash within 30 days of the first anniversary of completion.

"As set out in the company's interim results announcement on 27 December 2023, the board of WH Ireland has been focused on returning the business to sustainable profitability, with an emphasis on restoring growth in revenue in both the capital markets division and its wealth management division, alongside continued cost discipline," it said.

"The directors had also committed to assess all strategic opportunities for WH Ireland, as they arose. The directors believe that the sale of the capital markets division will help to satisfy these objectives by immediately reducing the liabilities, as well as the working and regulatory capital requirements of the group, while also increasing potential cash inflows if and when the deferred consideration is paid, shortly following the first anniversary of completion of the transaction."

WH Ireland also gave a brief update on trading. It said market conditions have remained "challenging", especially for brokers specialising in AIM companies.

In the wealth management arm, assets under management at 31 March 2024 were £1.2bn, unchanged from 30 September but down from £1.4bn at the same time a year earlier.

At 0920 BST, the shares were up 6.3% at 4.25p.