Tullett Prebon's acquisition of ICAP business facing more regulatory hurdles

Tullett Prebon and ICAP have been asked for more information from the US Department of Justice over the proposed sale of ICAP's global hybrid voice broking and information business.

Both FTSE 250 companies said on Tuesday they have received a request for additional information and documentary material, which is often referred to as a "Second Request".

The companies said the request is relatively standard, and Tullett Prebon said it understands that the review is focused on the proposed post completion shareholding and governance arrangements between it and the new holding company.

Both companies said they are both resonding as quickly as possible to the request and believe the transaction will still be completed this year.

Tullett Prebon agreed to buy the business from its rival inter-dealer broker in November in an all-shares deal.

Tullett will issue a parcel of new shares greater than its current share capital such that once the deal is completed, ICAP will own 56% of the merged entity before distributing 36.1% of Tullet to its own shreholders.

Once the deal is concluded, current Tullett shareholders will own 44% of the enlarged company, 36.1% by ICAP shareholders and the remainder by a NewCo holding company of the ICAP business.

Tullett will also take on gross debt of £330m with the acquisition and the share issue means the deal is expected to be dilutive in first year.

After offloading its telephone-based 'voice broking' arm, ICAP will be left with its electronic broking and post trade businesses.