The shareholders of both ICAP plc and Tullett Prebon plc have overwhelmingly approved the reverse takeover deal between the companies. The ICAP voice broking unit transaction was presented to shareholders of both firms on the 1st of March after an official announcement was made by the companies in November last year.
The ownership of both firms has been siding with the management overwhelmingly with more than 94 per cent of Tullett Prebon’s shareholders voting for the deal, while over 95 per cent of the voters at ICAP approved of the transaction.
As part of the deal, Tullett Prebon has agreed to issue new Tullett Prebon shares comprising 56 per cent of the company’s share capital. The maximum amount of new shares to be issued is 325,426,232 which includes an allocation for up to 15,111,936 additional new shares of Tullett Prebon in connection with the deal.
Over 3,000 brokers and £1.5 billion in revenue
The transaction will lead to the creation of the biggest player in the industry with over 3,000 brokers and historical revenues totaling over £1.5 billion. Tullett Prebon is aiming to achieve close to £60 million worth of cost efficiencies by the third year following the completion of the deal.
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Before the transaction is completed, ICAP will incorporate a new company called ICAP NewCo, which will become the new holding company of ICAP. The existing shareholders of ICAP will become shareholders of ICAP NewCo.
Options exchange and new shares issuance
The first phase of the deal requires Tullett Prebon to acquire about 64.5 per cent of ICAP Global Broking Holdings, which includes the voice broking unit of ICAP. The transaction will be financed with the issuance of new Tullett Prebon shares which will total about 45 per cent of the total capital of the firm’s share capital.
Tullett Prebon will then grant ICAP a put option, while ICAP will grant Tullett Prebon a call option. Both will become exercisable after the initial completion of the transaction between the companies. Should any of the options be exercised Tullett Prebon will acquire the remaining 35.5 per cent by issuing more new shares amounting to another 19.9 percent of the company’s share capital.
The options can be exercised within ten days of the completion date. Both tranches of new shares, totaling 200,041,894 at the time of initial completion and 110,272,402 at the time of option completion, will be issued to shareholders of ICAP NewCo.