UPDATE 1-Inter-dealer broker TP ICAP to buy Liquidnet for up to $700 mln

(Adds details from statement)

Oct 9 (Reuters) - TP ICAP, the world’s biggest inter-dealer broker, on Friday agreed to buy electronic trading network Liquidnet for a revised price of between $575 million and $700 million and announced a $425 million rights issue to fund the purchase.

Liquidnet, which has more than 1,000 buyside clients, will help TP ICAP’s digital push, the company said.

“We believe that TP ICAP’s strong dealer relationships and product expertise are highly complementary to Liquidnet’s electronic capabilities and global buyside customer base,” TP ICAP Chief Executive Officer Nicolas Breteau said.

The deal, the biggest in TP ICAP’s history, has led to a 15% fall in the company’s share price since the talks were announced.

The lower end of the consideration has been revised down from $600 million as per TP ICAP’s statement last month when it said it was in advanced talks to acquire Liquidnet.

The London-based company, which itself is a combination of brokers Tullett Prebon and ICAP, added that if the deal gets the shareholders’ nod, the board intends to pay only half of the minimum 94 million pounds ($121.72 million) dividend for 2020 to fund the buyout.

TP ICAP said the combined group will target mid-single-digit cross-cycle revenue growth in the medium term, with Liquidnet expected to improve its underlying operating margin by about 300 basis points.

The deal will start adding to underlying earnings in the third year of closing, TP ICAP said. ($1 = 0.7723 pounds) (Reporting by Muvija M in Bengaluru; Editing by Krishna Chandra Eluri)


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