Jarvis Securities Sells Retail Brokerage Business for £11 Million
Why we think this is good
The sale of Jarvis Securities' retail execution-only brokerage business to Interactive Investor for up to £11 million is a positive strategic move for the company. The transaction price seems reasonable compared to the company's market cap and recent financial performance. While the completion is subject to certain conditions, the timeline appears relatively short, and there are no major concerns around the terms of the agreement. The company's focus on its Model B clearing and settlement service arrangements could be a positive transformation, and the potential return of distributable reserves to shareholders is also a positive outcome.
Key Points
- Conditional sale of retail execution-only brokerage business to Interactive Investor for up to £11 million
- Jarvis to focus on Model B clearing and settlement service arrangements after completion
- Potential return of distributable reserves to shareholders if Jarvis becomes an AIM Rule 15 Cash Shell
Summary
Jarvis Securities plc (AIM: JIM) has executed a conditional sale agreement to dispose of its retail execution-only brokerage business to Interactive Investor Services Limited for a consideration of up to £11,000,000 payable in cash. The transaction will exclude a small number of out-of-scope customers. Following the sale, the Group will only comprise the Model 'B' clearing and settlement service arrangements within JIML, and the Group is beginning the process of terminating these arrangements and closing down its other operations. If the transaction completes and the Model B Arrangements are terminated, Jarvis would then no longer own, control, or conduct any trading business, and would become an AIM Rule 15 Cash Shell, requiring a reverse takeover within 6 months.