MANAGEMENT AT Ballsbridge-based stockbroker Merrion Capital have bought back the company from troubled Icelandic financial group Landsbanki Islands.

No sum was disclosed but it is understood that Merrion's management team, which is led by co-founder and chief executive John Conroy, are paying close to €30 million for Landsbanki's 84 per cent stake in the business.

This represents a steep discount on the €90 million the Icelandic group has paid since 2005 to acquire the shares from Merrion's founders and other equity holders.

The price reflects the recent collapse of financial markets, which resulted in Landsbanki being placed into receivership last week by Iceland's financial regulator.

Merrion recorded pretax profits in 2007 of €25.5 million. This is expected to decline this year due to the current financial turbulence, although the broker is still expected to post a double-digit profit figure for 2008.

It is understood that the deal will be funded by Merrion management and employees from their own resources.

It is not clear how many of the 114 staff at its offices in Dublin and Cork will be offered the chance to participate in the buyout.

Some 55 staff were equity holders at the time of Merrion's sale to Landsbanki in 2005.

It is not clear if New York-based investment bank Allen & Co will participate in the buyout.

The group still retains about 4.5 per cent of the Irish group, having held 30 per cent of the business at the time of the sale to Landsbanki.

Speaking to The Irish Times, Mr Conroy acknowledged that the environment for stockbrokers is difficult.

"Only time will tell if this is a good deal, but we have very good position in the market and a highly-energised group of people to try and make this work."

He said the business was "very profitable" and "well capitalised".

The deal, which is subject to the approval of the Financial Regulator, would place a valuation on Merrion of just under €36 million.

Earlier this year Merrion acquired Oppenheim Investment Managers for an undisclosed sum. This division has since been rebranded under the Merrion name.

Merrion's management moved quickly at the end of last week to conclude a buyout deal after another Icelandic banking group, Straumur-Burdaras, pulled out of a €380 million purchase of assets from Landsbanki, including its stake in the Irish stockbroker.

That sale was announced on October 1st but collapsed last Friday after Landsbanki was placed into receivership.

Merrion was sold to Landsbanki in November 2005 in a deal that involved an upfront payment and three additional payouts over a four-year period.

In August, it emerged that Landsbanki had paid €41 million earlier this year for an additional 17 per cent stake in Merrion. This brought its total investment in the Irish stockbroker to €90 million.

Landsbanki was due to pay €20 million next March for the final 16 per cent of the group.

Merrion was founded in 1999 when Mr Conroy and other executives resigned their positions in NCB Stockbrokers.