Tullett Prebon in Talks to Buy ICAP's Broking Business
November 06 2015 - 7:30AM
Dow Jones News
Interdealer broker Tullett Prebon PLC is in advanced discussions
to acquire the global broking business of its rival ICAP PLC,
according to statements issued by both firms Friday.
The acquisition, which is still under discussion and yet to be
completed, is the latest shake-up for the squeezed broking business
of the City of London.
The business has come under mounting pressure as trading
activity has shifted from voice to electronic platforms.
Profitability has also been hit by stricter regulation.
Any deal would include ICAP's technology and broking platforms.
Under a deal Tullett would issue new shares, which would be
distributed to ICAP's shareholders, the firms said. ICAP would
retain a minority stake in the enlarged Tullett Prebon group.
ICAP's global broking business together with iSwap totaled £ 808
million ($1.25 billion) in the year to March 31, compared with
ICAP's total revenue of £ 1.28 billion.
London-based ICAP and Tullett Prebon are among the world's
largest interdealer brokers. They act as intermediaries between
investment banks and the market, by selling financial instruments
such as bonds, currencies and derivatives.
Both firms announced head count reductions and strategic reviews
to their business in recent months.
"Consolidation in this industry, and the disappearance of some
names, is inevitable," said Frederic Ponzo, managing partner of
consultancy Greyspark. He described the pressure from the shift to
electronic trading and regulation for the brokers as "massive."
Write to Chiara Albanese at chiara.albanese@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 06, 2015 07:15 ET (12:15 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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