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StockMarketWire.com
ICAP, a leading markets operator and provider of post trade risk mitigation and information services, is to combine its voice and hybrid broking and information business with Tullett Prebon.

Tullett Prebon intends to acquire all of ICAP's global broking business ("IGBB") in return for the issue of new shares in Tullett Prebon to a new holding company of the ICAP group ("ICAP NewCo") and to ICAP's shareholders, representing in aggregate 56% of the enlarged Tullett Prebon issued share capital as at completion.

No changes are anticipated to the Board of Directors of ICAP, each of whom is expected to become a Director of ICAP NewCo. On completion, Ken Pigaga, currently group chief operating officer of ICAP, will resign from his current position in ICAP and be appointed to the board of the enlarged Tullett Prebon as a director and chief operating officer.

Michael Spencer, group chief executive officer of ICAP, said: "Today we announce a compelling opportunity to bring together two world class, client focused broking businesses, both with a proud heritage.

"By coming together they will benefit from improved scale, allowing for a significantly improved product suite and service for customers. Financial regulatory reform means that the global financial markets have profoundly changed and this transaction means both companies will be better suited to meet the market's changing needs and better serve our customers."

StockMarketWire.com
ICAP's revenues for the third quarter to the end of December were 5% lower than a year ago on a constant currency and on a reported basis.

ICAP says overall market conditions have remained challenging and risk appetite remains subdued among its clients as they continue to deleverage their balance sheets. The first step in the normalisation of the US interest rate environment was taken as the US Federal Reserve raised interest rates by a quarter percentage point. However, volatility remained relatively benign through the quarter before picking up at the start of the new calendar year. Group chief executive Michael Spencer said: "Against the backdrop of a difficult market, our business continues to perform well, particularly the Post Trade division which goes from strength to strength. The decision by the Fed to raise interest rates was very welcome, but we are still operating in an environment of ultra-low interest rates and we have some way to go before we return to more normal market conditions. Risk appetite remains subdued and I see few signs that this will pick up any time soon, even after markets began the year with a short burst of extreme volatility. "The transaction to combine our global hybrid voice broking business with Tullett Prebon is proceeding well, and marks a defining moment in the transformation of the Group into a financial technology business. We have laid the foundations for our electronic and post trade businesses to deliver strong, cash generative returns for the future. I remain confident and excited about the range of opportunities ahead of us and our ability to execute our strategy successfully and provide long-term profitable growth."

Goldman Sachs today reaffirms its neutral investment rating on ICAP PLC (LON:IAP) and cut its price target to 520p (from 560p).

StockMarketWire.com
China Foreign Exchange Trade System - China's official inter-bank market trading platform and infrastructure provider - has chosen ICAP to deliver the underlying technology for fixed income and foreign exchange (FX) electronic execution services in mainland China.

The technology will be delivered by EBS BrokerTec, ICAP's market-leading electronic FX and fixed income business, which will form part of NEX Group plc, following the completion of the transaction with Tullett Prebon to dispose of ICAP's global hybrid broking and associated information businesses.

The deal, valued at $65 million over a three-year period, will see ICAP expand into China, a key growth market for the business, with EBS BrokerTec establishing a local office and development centre in Shanghai.