"I would expect an announcement very soon, within days, if anything happens," the source said. Market speculation late last week had BNP Equities Australia Ltd buying the Australian operations of the American-owned brokerage.

Prudential-Bache declined to comment on the speculation, while BNP Equities Australia was not immediately available for comment.

The two operations were seen as a natural fit, with complementary rather than overlapping operations, the source said.

Prudential-Bache, with 240 employees compared to BNP Australia Equities' 120, has the larger local operation with an extensive retail network as well as a substantial corporate business, although principal book trading gives the French firm a larger market share of Australian StockExchange trade, brokers said.

A takeover would be the latest in a long line of ownership changes among the Australian stockbroking fraternity. In the last two years Salomon Smith Barney bought CountyNatWest and Merrill Lynch acquired McIntosh Securities, while ABN AMRO took over BZW's operations, Deutsche Bank bought EL&C Baillieu and CS First Boston bought back First Pacific.