ICAP Gets Bondholder Consent for Tullet Prebon Voice-Broking Deal

Bondholders consented to the planned disposal from ICAP to Tullet Prebon.

Following the March 1st solicitation of consent earlier this month to holders of nearly 475 million units of currency in guaranteed notes issued by ICAP PLC, and ICAP Group Holdings, an extraordinary meeting was held today with the note holders in connection with amending certain terms and conditions related to the disposal of ICAP’s global hybrid voice-broking and information business to Tullett Prebon plc.

The solicited consent by ICAP from the bondholders included for a sterling note consisting of £125 million, and a euro note for €350 million respectively. The sterling note is held by many retail investors and has a 5.5% rate and July 2018 maturity, whereas institutional investors made up the €350 million note which carries a 3.125% rate and is due march 2019. The solicitation earlier in March also had to do with unsolicited ratings, and the level of yield, among other disclosures about the notes in the consent solicitation memorandum.

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Consent level reached

At least 75% consent was needed for approval, yet ICAP saw broad support with 96.1% in favor with regard to the 2018 note and 100% support for the 2019 note, thus enabling it to proceed with the disposal of its global hybrid voice-broking unit and information business to Tullet Prebon. 

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Early consent on the euro note was incentivized with a 50 cent consent fee that will be paid for those that consented prior to may 11th, whereas any latecomers will be paid 25 cents for their approval. The nearly 4% of holders of the sterling note that didn’t consent will not receive the consent fee.

Moving ahead in pipeline

The proposals could be terminated on or prior to the relevant payment date as per the consent solicitation memorandum and any consent fees are expected to be paid on May 10th 2016 as it falls six weeks from today’s resolution.

The news follows a series of steps that were needed to complete the transactions underway for Tullet Prebon to acquire the two business units from ICAP as announced last November.

Finance Magnates highlighted earlier this week when shareholders of both companies overwhelmingly approved the deal, as it’s expected to unlock potentially £60 million worth of cost efficiencies by the third year after it closes, helping combine 3,000 brokers and revenues totaling over £1.5 billion.

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