# Close Brothers to sell Winterflood Securities to Marex for £103.9m

- Link: https://www.directorstalkinterviews.com/close-brothers-to-sell-winterflood-securities-to-marex-for-103-9m/4121209233
- Published: 2025-07-25T07:36:19+01:00
- Author: Amilia Stone

**Close Brothe[rs Group plc](https://www.directorstalkinterviews.com/ftse-company/rs-group/rs1.l)**(
LON:CBG) has agreed to sell its execution services and securities business, Winterflood
Securities to Marex Group plc for a consideration amount of approximately £103.9
million in cash.

The Transaction is aligned with the group’s strategic priorities to simplify the
portfolio, enhance operational efficiency and drive sustainable growth. As previously
outlined, Close Brothers is actively evaluating its portfolios to ensure that returns
are maximised, and believes this is the right time to sell Winterflood and focus
on the group’s core lending activities.  

The Transaction is expected to complete in early 2026 and is conditional upon receipt
of customary regulatory approvals.

> **Mike Morgan, Close Brothers Group Chief Executive, commented:**
> _“Following a comprehensive strategic review, the Board is pleased to announce
> the sale of Winterflood to Marex. This transaction marks another important step
> in simplifying the group to focus on our core specialist lending business, following
> the sale of CBAM in February 2025. We see Marex as an excellent steward for the
> business going forward, we thank the Winterflood team for their hard work and 
> commitment over the years, and wish them every success in their next chapter with
> Marex.” _

> **Ian Lowitt, Marex Chief Executive Officer, commented:**
> _“This acquisition gives us an opportunity to transform our existing equity market
> making business into a leading franchise, utilising the technology and connectivity
> of what is the leading brand in this market. We believe we can gain economies 
> from operating at scale and also benefit from Winterflood’s great technology and
> strong client relationships, which will enable us to introduce additional products
> and services from across our platform to a new set of clients.” _

**Consideration**

Under the terms of the Transaction, the consideration payable to Close Brothers 
comprises cash consideration of approximately £103.9 million payable by Marex to
Close Brothers on completion, based on 30 April 2025 financials, and a £ for £ adjustment
for movements in the tangible net asset value of Winterflood between 30 April 2025
and completion.

**Financial impact**

On completion, the Transaction is expected to benefit the group’s Common Equity 
Tier 1 capital ratio by c.30 basis points based on financials as at 30 April 2025
on a pro forma basis, increasing the group’s CET1 capital ratio from 14.0% to c.
14.3%.

This calculation is based on a tangible net asset value of £88.9 million and assumes
an immediate reduction in market and credit risk weighted assets associated with
Winterflood. We expect further CET1 capital ratio benefits of up to c.25 basis points
from a reduction in operational risk RWAs currently associated with Winterflood 
in due course.

Winterflood is expected to fulfil the requirements of IFRS 5 and be classified as‘
held for sale’ and ‘discontinued operations’ in the group’s Full-Year 2025 financial
statements. A goodwill impairment loss on disposal of c.£15 million^(1) is expected
to be recognised on classification as held for sale. No further loss on disposal
is expected to be recognised on completion of the Transaction in the Full-Year 2026
financial statements.

The estimated financial impact included in this announcement is unaudited and remains
subject to review as part of the group’s interim and full-year audit processes.

**Additional information**

The Transaction is subject to obtaining approval from the FCA and FINRA (as Winterflood
Securities Limited is regulated by the FCA and Winterflood Securities US Corporation
is a FINRA registered broker-dealer under 15a-6) in respect of the change of control
of Winterflood.

A break fee is payable by Marex in the event that FCA approval for the Transaction
is not received.

Either Close Brothers or Marex have a right to terminate the share purchase agreement
if any of the Regulatory Conditions have not been satisfied or waived by the long
stop date under the SPA. Marex also has a right to terminate the share purchase 
agreement before completion of the transaction in certain limited circumstances 
which are not remedied within 10 business days of their occurrence: in the event
that Winterflood (i) breaches certain regulatory capital and liquidity levels, (
ii) defaults on one of its financing facilities which is then terminated, (iii) 
has certain FCA or FINRA  regulatory licences suspended or cancelled or (iv) there
is a material breach of the conduct of business restrictions before completion.

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