Acquisitive Canadian brokerage Canaccord Financial Corp. has expanded lately in Australia and China, and now is looking back to England for another purchase.
The firm said Tuesday that it has had "preliminary discussions" with Evolution Group Plc about making an offer for the company. Evolution has a banking business that would tie in with Canaccord's current London operations, as well as a well-regarded asset-management firm that doesn't show an obvious fit for Canaccord.
Canaccord was forced to disclose its interest after a leak in the U.K. press.
Canaccord has historically grown by acquisition. It bought a London-based brokerage in the 1990s to get into that market. Of late, the firm has acquired a China-based financial advisory firm and a stake in an Australian-based brokerage to give it a larger global footprint.
The London market is depressed right now for brokers, giving buyers with patience a chance to make a counter-cyclical acquisition. Despite its high costs in terms of office rents and salaries, London is still an attractive place to be as a centre of global mining finance, especially for companies that operate in Africa and Eastern Europe.
Other Canadian firms have been linked with Evolution, including Royal Bank of Canada and Canadian Imperial Bank of Commerce, but it's worth noting that while the U.K. takeover laws forced Canaccord to disclose its interest because there is some truth to the talk, neither RBC nor CIBC has had to say anything.