Amadeusz Juskowiak

Exco buys us government securities broker

Exco International Plc a subsidiary of British and Commonwealth Shipping Co Plc BCOML said it had agreed in principle to buy an 80 pct stake in RMJ Holdings Corp for about 79 mln dlrs

Exco Chairman Richard Lacy told Reuters the acquisition was being made from Bank of New York Co Inc BKN which currently holds a 501 pct and from RMJ partners who hold the remainder

Bank of New York and the partners will retain about 10 pct each and these stakes will be bought over the next six years

RMJ is the holding company of RMJ Securities one of the largest US Government securities brokers

It is also involved in broking notes obligations and other instruments sponsored by US Federal agencies

Lacy said Exco had been considering buying a US Government securities broker for the past four years and had made an offer for RMJ when it was sold by Security Pacific Corp SPCN in 1985 RMJ was then valued at about 50 mln dlrs

B and C managing director Peter Goldie said RMJ would be bought at about the same multiple as Exco suggesting net income of around 16 mln dlrs

The companys earnings had not been hit by the halving of brokerage fees some 14 months ago as volumes had since doubled

Lacy said that RMJ employed some 300 people with 200 in the brokerage business and about 70 in its SMS unit which provided computer software for the financial services community

RMJ Securities had offices in New York where total market turnover of US Government securities was 110 billion dlrs a day and in London where it has 15 billion

It was also given permission last week to open an office in Tokyo where total market turnover had lifted rapidly to about five billion dlrs a day

The acquisition would contribute between five and 10 pct of B and Cs share earnings in 1987 on a proforma basis

REUTER