Ex-HSBC corporate financier Tony Fabrizi has become an AIM broking boss through the takeover of cash shell Castor Investments.

In the reverse takeover deal, Castor is issuing shares to the value of £8.35 million to the owners of broking group Merchant Securities, founded 19 years ago and now headed by Fabrizi, a former luminary on HSBC's investment trust side until leaving in 1998. He now owns 25.5 per cent of AIM-quoted Castor, which is to change its name to Merchant Securities, with Gartmore holding 17 per cent.

Several familiar City figures are Joining Fabrizi in this new venture, with Arden Partners as nominated adviser and broker, and they are replacing the old Castor board. The proposed new chairman is ex-HSBC Investment Banking director John Green, and new directors include Patrick Claridge, former UK head of E*TRADE Securities, and as non-executive, Charles Price, veteran of N.M.Rothschild and Singer & Friedlander.

Merchant Securities, handling traditional private client and institutional advisory and broking business, is already the product of a takeover this year by a private investment advice, corporate finance and fund management group controlled by Fabrizi. In the year to March, Merchant Securities made a net profit of £580,000 on £4.1 million turnover and since then the company has raised £12 million in corporate finance deals.

The deal values Castor/Merchant at £9.7 million, with pre-deal Castor holders holding a residual 14 per cent of the new group. Castor's depressed shares have perked up 0.88p to 5.5p and could go further.

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