Interdealer broker TP ICAP is seeking a £315m rights issue to fund its acquisition of electronic trading network Liquidnet Holdings.
The rights issue is expected to result in the issue of 225.3m shares for qualifying shareholders equivalent to 40 per cent of the existing share capital base.
The FTSE-250 listed firm announced the deal in October as it looks to diversify beyond its current offering. Liquidnet primarily makes money from equities but TP ICAP will use its technology and global buyside customer base to boost revenues.
“This acquisition is a unique opportunity to transform TP ICAP’s growth prospects by materially accelerating our strategy of electrification, aggregation and diversification,” said chief executive Nicolas Bretau. “We believe our two businesses are highly complementary and the deal, when completed, will help us to drive growth and shareholder value in the medium to long term.”
In an unscheduled trading update, TP ICAP reported a subdued end to 2020 after profiting off the back of market volatility in the first half of the year.
Revenue for the first nine months of 2020 was two per cent lower on a reported basis, and the broker expects full-year revenue to be one per cent lower.
Revenue slowed due to subdued activity in its core Global Broking business after a relatively strong first quarter.
This slowdown was partially offset by growth in its Data & Analytics, Institutional Services and Energy & Commodities division.
The broker acts as a go-between for banks and investment houses in daily trading as part of its institutional services offering so benefits from heightened market volatility.