London 11/06/2015 - A news story on Thursday stating that Marex Spectron was up for sale failed to excite the metals market, because the commodities broker has actually been open to approaches for months without notable buying interest.
"Marex was up for sale the day they were bought by JRJ. That's the nature of private equity," a source close to the company said.
Marex has been majority owned by investment firm JRJ since 2009 and was formerly the commodity unit of Refco. Other than metals, it also trades agricultural, energy and financial products. It acquired commodity broker Spectron from Norway's Imarex ASA in 2011, as well as the global markets division of Eden Financial Ltd.
Rumours of a potential sale have circulated many times in the past three years but each time died quickly due to the absence of buyers, and several sources said this time is probably no different.
"The company was only ever bought to beef it up and sell it on," a second source said, adding that Marex's business model was volume-based rather than profit-focussed, which may make it harder to find a buyer.
Several market participants, including shareholders, said that it was unlikely that the company would separate its proprietary and brokerage business, with one saying it would be a "nightmare to split."
"The company will be sold as one," the first source also said.
A spokesperson for the broker played down talk of a sale, and said that as the brokerage is owned substantially by private equity investors, "speculation and rumours about the future ownership of the firm are not uncommon" and there have been several instances over recent years."
"We would never comment on those rumours other than to say at a time when Marex Spectron has recently reported strong results, is consolidating dominant market positions in our core products and is growing rapidly in Asia and North America, speculation about our ownership is bound to be heightened," he added in an emailed statement.
In 2014, the broker recorded a profit before tax of $22.6 million, a $28.8 million increase on the prior year, driven by a nine-percent increase in net revenues and effective cost control.
Yet, the chances of a deal completing this year is "unlikely", a second source said, as we are already halfway through the year.
(editing by Perrine Faye)