New York : LaBranche & Co Inc (LAB.N) said on Wednesday it agreed to sell its New York Stock Exchange specialist business to Barclays Plc for $25 million (Dh91.75 million) in cash to streamline its business and free up capital.
LaBranche, whose flagship specialist operation is among the Big Board's largest, said Barclays would purchase all of its net specialist positions as part of the deal that solidifies the UK-based bank's position as top market maker on the floor.
LaBranche shares soared 36 per cent in after-hours trade.
The move frees LaBranche from $76 million in capital requirements related to the specialist operation, in which the firm is responsible for the dwindling number of orders still matched on the floor, as markets go increasingly electronic.
LaBranche also does market making in derivatives and non-stock markets in the United States and elsewhere, and provides brokerage services. It said it would now focus on these operations, and retain its NYSE Euronext shares.
The company added that it would redeem all of its $189.3 million in total debt, and ramp up its share repurchase plan.
The company said as a result of the Barclays deal, it now expects to report an after-tax loss of about $72.5 million, or $1.38 per share, in the fourth quarter. It expects to report earnings of seven cents per share in the quarter on a pro-forma basis.
LaBranche is set to report quarterly results on January 20, after logging pro-forma losses the last few quarters.
Previous acquisitions
The company's shares jumped $1 to $3.78 after the close of markets, their highest point since September. The sale of the specialist business, now called its NYSE Designated Market Maker, is expected to close by the end of the month.
LaBranche is responsible for about 700 NYSE-listed securities while Barclays is already responsible for about 900, the UK-based bank said in a separate statement.
Barclays acquired the rights of Bear Wagner Specialists in March. The bank in 2008 acquired the US operations of Lehman Brothers, which a year earlier had bought the assets of Dutch specialist market maker Van der Moolen.
