A megabroker was created today as City giant TP Icap snapped up US group Liquidnet for up to $700 million in a deal that adds electronic broking to the bidder's business doing trades over the telephone - so-called voice broking.
The deal brings together TPIcap's operation dealing largely with the sell-side of deals - banks - with Liquidnet's electronic platform dealing with the buy-side - investors.
TP Icap will pay for the deal through a rights issue raising $425 million.
Liquidnet trades 12% of all US equities every day and is what is known as a dark pool.
The deal was first announced last week but today's finalisation is on better terms than originally thought, with the upfront cost being reduced to $575 million, with the rest depending on performance.
Shares fell last week when the deal was announced because TP Icap said it would be cutting its dividend to fund it.
They have risen since as analysts have been explained the industrial logic of potentially turning the company into a "fintech" business.
TP Icap said the deal would help it become a digital financial infrastructure player
The combined business will be based in London.
Nicolas Breteau, chief executive of TP Icap said the strong relationships his dealers have with their clients would complement the Liquidnet electronic platform and buyside customer base. Liquidnet CEO Brian Conroy said the deal would mean the combined business could service a wider range of clients.
