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January 16, 2019  

Weeden, Piper Jaffray Discuss Possible Deal

Weeden & Co. is exploring the sale of all or part of its business, including its prime-brokerage division.

Sources said the Greenwich, Conn., broker-dealer is in talks with investment bank Piper Jaffray. The initiative follows months of negotiations last year over the possible sale of Weeden’s prime-brokerage operation to a blockchain-technology company. That deal never closed.

“Nothing is carved in stone,” one source said of the current negotiations. Weeden will make “some sort of decision probably by month’s end whether to package it all, sell individual pieces or do nothing.”

A Weeden spokesman declined to comment. A spokesman for Piper Jaffray didn’t respond to a request for comment.

Weeden, an employee-owned firm founded in 1922, offers equity and equity-derivative trading services to hedge funds and other institutional investors. A source at a rival brokerage estimated Weeden has 700-1,000 clients.

It entered the prime-brokerage field in 2013 via its purchase of Saxis Group, a so-called introducing broker that catered to smaller hedge fund managers while clearing trades through Goldman Sachs and BNY Mellon’s Pershing unit. Weeden Prime Services does business with more than 150 hedge funds.

Weeden also offers money-management services via a passive investment in Minneapolis-based Leuthold Group. Leuthold had $1.5 billion under management at yearend 2017, including a small hedge fund.

Piper Jaffray, a publicly traded company headquartered in Minneapolis, offers a full range of advisory, trading and asset-management services. But it doesn’t have a prime-brokerage business.

Last February, Weeden signed a letter of intent to sell a majority stake in its prime-services division to tZero, a blockchain-technology unit of Overstock. But the online retailer disclosed in a November filing that the deal was off. Overstock had offered $18 million for the stake.