Patersons Securities has announced an in-principle agreement to merge with the stockbroking business of Tolhurst Group.
The union of the two businesses will create of one of Australia's largest full-service retail stockbroking businesses.
The new organisation will have more than 400 employees, 370,000 clients and one of the largest advisory networks in Australia.
The proposed merger will be effected through the sale of the Tolhurst broking business and brand names to Patersons, a company statement said.
Under the agreement Patersons will assume responsibility for property leases related to the Tolhurst stockbroking business, subject to certain conditions being satisfied.
Tolhurst will have the opportunity to subscribe for new shares in Patersons representing up to 31 per cent of the merged group's expanded capital, which is representative of the share of revenue that Tolhurst is contributing.
As part of the transaction, Patersons will also be granted options to acquire 15 per cent of Tolhurst's total issued capital.
Under the proposal, the new business will trade as Patersons Securities Limited.
The proposed transaction was a positive outcome for Tolhurst shareholders, clients and staff, according to Tolhurst chairman David Browne.
"This is an exciting day for Tolhurst clients and will ensure they receive the best possible levels of service from a strong, expanded, debt-free firm going forward," he said.
"For Tolhurst shareholders and advisors, the merger provides the opportunity to be part of an Australian broking success story."
