Tullett confirms talks over Icap broking business

Interdealer broker Tullett Prebon has confirmed discussions regarding the possible acquisition of larger rival Icap’s global broking business.

Shares in both FTSE 250 companies surged following the announcement, and by 1055 GMT, Tullett was up 4.3% to 343p while Icap was 6.6% higher at 472.90p.

If the deal were to go through, Tullett would issue more than 100% of its existing share capital to fund it.

Icap shareholders would hold the majority of the new Tullett shares, but would only own a minority stake in the enlarged Tullett Prebon group.

Icap confirmed the sale discussions involved the global broking business's associated technology and broking platforms, including iSwap and Fusion, its associated information services businesses and certain of its joint ventures and associates.

The announcement followed press reports earlier suggesting the companies were close to announcing some form of deal following months of talks.

In March, reports suggested Icap was looking to separate its fast-growing electronic forex and fixed-income trading arm EBS-BrokerTec from the legacy business that handles client trades over telephone.

Earlier on Friday, Tullett shares were sharply in the red as the company said it would take a charge in its full year accounts after cutting office brokers by 5%.

Tullett group said the cost-saving measure was implemented in the wake of a further reduction in market volumes in the period since the end of June, which has weighed on revenue in the second half of the year.