Smith likely to head Tullett/GFI

LONDON (Reuters) - Tullett Prebon (TLPR.L) CEO Terry Smith is likely to retain his position in the enlarged entity if a merger with U.S. rival GFI Group (GFIG.O) goes ahead, people familiar with the matter said on Thursday.

Smith, who holds about a 4 percent stake in Tullett, the world's second biggest broker between banks, will be in the driving seat despite GFI Chief Executive Mickey Gooch's much larger stake in the new entity.

Gooch, who would hold roughly 22 percent in the enlarged group, is likely to take an executive deputy chairman role, the people said.

Keith Hamill, chairman of Tullett, is likely to take the chairman's seat in the enlarged group, while GFI President Colin Heffron would become the chief operating office.

The deal, which will create a bigger firm to earn stronger margins and keep pace with rival ICAP (IAP.L), the world's biggest interdealer broker, could close as early as mid-September, Smith has said.

Analysts estimate the combined group should create synergies of $40 million in 2009 and $80 million in 2010.

Smith, a helicopter pilot and former amateur boxer, is also in talks about a takeover by Japanese securities group Nomura Holdings Inc (8604.T), according to sources familiar with the matter.

If the Tullett/GFI deal goes ahead on an all stock basis, roughly 1.75 shares of Tullett would be exchanged for each GFI share, valuing GFI shares at $13.65 each, or 14 times 2009 earnings -- a 20 percent discount to an average earnings multiple of 17.7 times since GFI's listing in 2005.

Tullett shares trade at 10 times 2009 earnings, according to Thomson Reuters estimates.