Finance group Merchant Securities, headed by Tony Fabrizi, has agreed to buy control of broker John East for £4.9 million.

EX-HSBC corporate financier Fabrizi, who brought Merchant to AIM last year via cash shell Castor, has clinched a cash and shares deal for Merchant to buy East Worlidge Holdings, holding company for entrepreneurial broking group John East & Partners. The enlarged group will have John East's status as nominated adviser to 33 AIM companies and broker to 22 and John East himself, a genial veteran of the more adventurous regions of the market, will join the Merchant board with an 11.22 per cent shareholding.

East, a director of the Tory-oriented Carlton Club (and, many years ago, of collapsed Guidehouse Group) has subscribed modestly to the £1.5 million placing by Merchant Securities at 35p to fund part of the cash element of the bid, after which Fabrizi's holding comes out at 17.5 per cent. Fabrizi comments, 'Overall, we intend to use this transaction as a platform to build a broadly based financial services group that provides services to corporate clients, institutional investors and private investors.’

Merchant Securities shares have rallied from a depressed 35p to 43p this morning, valuing the company at £8.3 million. It should be a lively market.

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Merchant Securities	AIM	£5.46m	7.00p	0.00p
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