Crikey’s Deloitte-BDO merger rumour has hit the mainstream press today, with a Deloitte spokeswoman telling The Age‘s Leon Gettler that the smallest of the big four accounting firms is looking to bulk up by merging with a second-tier accounting firm, but that BDO is only one on a list of possible targets. Says Gettler:

Speculation in news website Crikey has Deloitte merging with accountants BDO, but Deloitte said BDO was only one of several firms to which it had been talking. No decision has been made but an announcement is expected in the next few weeks. A Deloitte spokeswoman said: “We are in discussions with numerous firms, including BDO. It could be in the next couple of weeks or six months — nothing has been decided or agreed to.”

Crikey spoke to the same spokeswoman after the daily email had gone out yesterday and was told that Deloitte is “constantly in discussions” with second tier firms and is currently “negotiating with a range of organisations”. But she also told us that Deloitte wasn’t the only member of the Big Four looking to merge with smaller firms.

So could this be part of a bigger trend, where members of the Big Four, and some of the bigger second tier firms, are looking to swallow up smaller, successful second tier firms to get to the increasingly lucrative SME market?

SMEs make up 97% of companies in Australia, but only 3-5% are regarded as high growth, desirable targets by top tier firms like Deloitte. Far better for them and companies like BDO to join forces and target emerging companies together.

Les Jones, a partner at Grant Thornton in Brisbane, says that increased merger activity – and speculation about it – is to be expected at the moment, with business, and thus small business, booming. BDO, which is huge in Brisbane, has itself been quite busy in the acquisition stakes, Jones told Crikey this morning, and is now in a unique position among second tier firms.

Another factor driving consolidation, says Jones, could be increasing pressure on smaller firms from heightened industry regulation standards.

Another rumour currently doing the rounds in the accounting profession that Australia’s largest accounting practice, PriceWaterhouseCoopers, has purchased Pitcher Partners – the largest Melbourne firm outside of the Big Four that would give PWC direct entry into Melbourne’s mid-market and SMEs.

A spokeswoman from PWC told Crikey this morning that this is untrue – it has not bought Pitcher Partners and is not in talks to buy the Melbourne firm – but, that PWC was “in constant dialogue with other practices”. Sound familiar?

When we called Tim Jonas, head of Pitcher Partners, for a comment on this tip, his PA told us that Jonas wouldn’t talk to Crikey because “he doesn’t subscribe to the internet.”