Merrion Capital owner Landsbanki is acquiring troubled UK stockbroker Bridgewell for £60.3 million (€88.2 million), a deal that gives it control of a second brokerage in the City of London.

The takeover gives the Icelandic bank an increased presence in the support services and property sectors but it marks the end of a difficult period for the broker on the public markets.

Bridgewell raised £8.2 million in a public placing on the Alternative Investment Market in London which was priced at 140p per share. The Landsbanki deal prices the stock at 125p, a very modest premium over its closing price of 123.5p.

Landsbanki said Bridgewell will complement the business of of Theather & Greenwood, the London broker it acquired for £42 million in advance of the Merrion takeover late in 2005.

Landsbanki paid more than €27 million upfront for its initial 50 per cent stake in Merrion, but the final deal could be worth €100 million if the firm's profit growth in 2006 year continues this year and next.

It is considered a potential bidder for the Irish Nationwide Building Society, whose sale is imminent.

In addition, the bank also owns pan-European firm Kepler Equities. Landsbanki said it will be be second-largest broker to companies on the London Stock Exchange, measured by number of clients as result of the deal.

Bridgewell's chief executive left in January after a 60 per cent drop in profits. Discussions on a takeover have been ongoing since March.

"Whilst the board believes that Bridgewell has good long-term prospects as an independent company, we recognise that the sector in which Bridgewell operates is highly competitive and that there are benefits in being part of a larger organisation," said chairman Paul Manduca.

"In addition, the AIM market, which forms a substantial part of Bridgewell's business, has suffered a difficult period and we continue to operate in a challenging environment."