PhillipCapital Takes Struggling Walker Crips Private in £6 Million Buyout
The broker-dealer
PhillipCapital UK has agreed to buy out London-listed Walker Crips Group in an
all-cash transaction valuing the struggling wealth management firm at £5.96
million, the companies said today (Monday).
110-Year-Old Investment
Firm Just Got Bought for Pennies
The
Singapore-owned firm offered 14 pence per share, an 86.7% markup over Walker
Crips’ closing price of 7.5 pence on Thursday. The board unanimously backed the
deal, which will pull Walker Crips off the London Stock Exchange early next
year.
Walker
Crips has been bleeding cash while trying to clean up legacy compliance
problems and adapt to tougher UK regulations. The company took a £5 million
emergency loan from PhillipCapital’s parent firm in July after racking up
losses remediating old client issues. That loan comes due in January, and
Walker Crips can’t pay it back.
The move
comes at a time when Phillip Securities, one of PhillipCapital’s units, is preparing
to expand into institutional foreign exchange trading, with the firm
selecting Integral to provide the technology needed to support larger clients
and higher volumes.
The latest
steps build on Phillip Securities’ existing equity CFD business and mirror
similar technology deployments at its affiliates, Phillip
Nova and Phillip Securities Japan, both of which already operate on
Integral’s systems.
Shares Stuck Below Offer
Price for Months
The stock
hasn’t traded near 14 pence since Walker Crips disclosed its annual losses and
the bailout loan back in July. Average daily volume over the past year was just
30,481 shares, barely 0.07% of shares outstanding, making it tough for
investors to exit positions.
“The
offer from PhillipCapital represents an attractive premium to Walker Crips’
current share price and offers shareholders the certainty of cash in the near
term, whilst also mitigating the risk associated with the repayment of the
Working Capital Facility in January 2026,” said Mark Nelligan, a
non-executive director.
Without the
buyout, Walker Crips would have been forced into a deeply discounted rights
offering to repay the loan. That would have diluted existing shareholders,
potentially by a lot, since PhillipCapital already owns 29% and could have
mopped up shares other investors couldn’t afford to buy.
Regulatory Squeeze Pushed
Firm to the Brink
The
110-year-old firm has been struggling with the costs of meeting modern
compliance standards. New consumer protection rules and interest rate
regulations on client cash hit profits hard. Walker Crips reported a £3.64
million operating loss for the year ended March 31, compared to a £60,000 loss
the prior year, on roughly flat revenue of £31.35 million.
The company
discovered a legacy systems problem that may have misstated client account
information related to fund unit types. That could affect some clients’ tax
liabilities. An internal investigation started in June is still ongoing.
PhillipCapital,
which has held a stake in Walker Crips since 1993 and has two board
representatives, plans to inject at least £7 million into the business after
taking it private. The buyer wants to focus on Walker Crips’ investment
management and structured products units while possibly selling off other
pieces.
Job Cuts Expected Despite
Growth Plans
The new
owner expects to cut roughly 10% of Walker Crips’ workforce within a year,
eliminating redundant back-office roles and functions tied to being a public
company. PhillipCapital said overall headcount should grow over time as it
tries to scale up the business.
“With
the support of the wider PhillipCapital Group, we believe that Walker Crips
will be able to fully capitalize on the undoubted market opportunity,”
said Linus Lim, a director at PhillipCapital.
The deal
requires approval from 75% of independent shareholders at a court-convened
meeting and from the Financial Conduct Authority. PhillipCapital’s concert
party can’t vote on the scheme itself but will vote in favor of related
resolutions at a separate general meeting.
Completion
is expected in the first quarter of 2026. To give the deal time to close,
PhillipCapital extended the loan repayment deadline from Jan. 31 to Feb. 28,
contingent on shareholders approving the buyout.
This article was written by Damian Chmiel at www.financemagnates.com.
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