TP ICAP to buy trading venue Liquidnet for up to $700m
Deal thrusts UK interdealer broker firmly into market for buying and selling shares
TP ICAP has agreed to buy US equities trading venue Liquidnet for an initial $575m, in a deal that thrusts the interdealer broker firmly into the market for buying and selling shares.
The London-based broker will launch a rights issue to raise about $425m and will only pay half the £94m dividend it expects to pay for the rest of the year. The purchase price could rise up to $700m, depending on other payouts and performance targets, it said on Friday.
TP ICAP said the acquisition would allow it to benefit from a fast-changing market, in which complex deals are increasingly negotiated electronically rather than over the phone, and take place between dealers and fund managers, rather than between banks.
TP ICAP’s 2,700 brokers act as middlemen for trading hard-to-shift swaps, commodities and bond deals. Liquidnet runs a private marketplace where fund managers with large slices of equity can buy and sell without moving the price on the open market.
Nicolas Breteau, chief executive of TP ICAP, described the deal as “a unique opportunity to transform TP ICAP’s growth prospects”.
The acquisition will boost TP ICAP’s growth targets from low single digit to mid-single digit over the medium term, the broker said. Trading in its core markets of interest rate swaps and commodities has slowed over the summer.