Japan's Tokai Tokyo Financial to buy 30 pct of Ace Securities-sources
29/07/2016 11:05
By Taro Fuse
TOKYO, July 29 (Reuters) - Tokai Tokyo Financial Holdings
8616.T will buy a 30 percent stake in smaller Japanese
brokerage Ace Securities Co, people with direct knowledge of the
matter said, a rare consolidation in an industry struggling to
remain competitive.
The owner of midsize brokerage Tokai Tokyo Securities will
become the largest Ace shareholder after buying the stake in the
privately held Osaka-based firm directly from large shareholders
for several billion yen, the sources told Reuters on Friday,
asking not to be named as the sale is still private.
A Tokai Tokyo spokesman confirmed the brokerage was
considering the purchase. Media officials for Ace could not
immediately be reached for comment.
The purchase comes as brokers are trying to boost their
assets to rely less on commissions from short-term trading of
stocks to defend themselves from market volatilities. But, like
Japan's legion of regional banks, the securities industry has
resisted large-scale consolidation despite declining
profitability.
Individual investors remain reluctant to trade stocks amid
sluggish market conditions, hurting earnings at even major
brokerages such as Nomura Holdings Inc 8604.T . urn:newsml:reuters.com:*:nL4N1AE2ES
Tokai Tokyo Securities, which has more than 4 trillion yen
($38 billion) in assets, will add Ace's 600 billion yen. Ace
owns much smaller broker Maruhachi Securities Co 8700.T , which
has a presence in Nagoya, the home of Toyota Motor Corp 7203.T
and many of its affiliates.
Tokai Tokyo Securities' net profit for the year to March
tumbled 32.8 percent to 12.4 billion yen. Ace Securities net
profit for the year to March slipped 54.6 percent to 928 million
yen.
($1 = 104.9200 yen)
(Reporting by Taro Fuse; Writing by Junko Fujita; Editing by
William Mallard and Muralikumar Anantharaman)
((junko.fujita@thomsonreuters.com; Reuters Messaging:
junko.fujita@thomsonreuters.com))
Keywords: JAPAN BROKERS/M&A