Davy, victim of scandal, attracts 105 million euros offer for his global fund management unit

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Davy Stockbrokers, the country’s largest brokerage that fell victim to a scandal this year, has attracted a 105 million euro bid from global financial services provider Waystone for part of its business, the Irish Examiner understands.

The size of the offering for Davy’s global fund management unit is significant and highlights Bank of Ireland, which is reportedly willing to pay up to € 500 million to acquire all of Davy.

News of the new offering for a little-known part of the broker’s business suggests the broker may be more than once thought about when details of the trading scandal first emerged in March.

Waystone’s offering increases the potential for other offerings from financial services players looking to acquire shares of the broker.

Davy went up for sale in March and appointed Rothschild to oversee the sale process just days after the Central Bank fined him € 4.1m after a multi-year investigation took place. revealed that the broker had not detected any wrongdoing in a sale of Anglo in 2014 Irish bonds.

The transaction involved what the central bank called a 16-person consortium, which included senior management shareholders, and their participation in both sides of the trade, without the client’s knowledge.

Waystone is a growing international provider of regulatory and support services for global fund managers. It is led from Ireland by Global Managing Director Derek Delaney and around half of its 500 employees work from sites in Dublin and Cashel in County Tipperary.

It has international offices in Luxembourg, London, Switzerland, New York, Singapore, Hong Kong and the Cayman Islands and recently announced significant backing from equity investor Montagu. Waystone declined to comment on the offer.

Davy Global Fund Management, the unit Waystone valued at 105 million euros, is difficult to value, industry sources say.

Davy’s main profit driver is its direct private client business and is believed to be the part of the business that Bank of Ireland is likely to be most interested in acquiring.

Davy was stripped of his role as prime broker with the National Treasury Management Agency as a seller of Irish sovereign bonds following the Central Bank fine in March.


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