ICAP will recapitalize Plus and provide funds “to build and develop the market,” the London-based broker said in a Regulatory News Service statement today.
“This transaction gives the companies quoted on Plus the security and confidence that their listing venue will continue trading and be further developed by ICAP,” according to the statement. ICAP will work “with issuers, sponsors, brokers and employees to develop the market over the long term.”
Plus, holder of one of five U.K. exchange licenses, had struggled to convince shareholders to accept ICAP’s offer after rejecting a takeover bid by Gulf Merchant Bank Ltd. The trading venue was scheduled to close after running out of money and failing to agree terms with a buyer.
In May, ICAP, the world’s largest broker of transactions between banks, agreed to pay 1 pound to buy Plus’s stock- exchange unit. It raised its offer to 500,000 pounds last week after “frustration” expressed by Plus Markets’ shareholders.
Set up by former London Stock Exchange Group Plc (LSE) executives, Plus sought to compete with LSE, obtaining exchange status in 2007. Still, it failed to attract sufficient listings to be profitable or draw trading away from LSE, unlike other new entrants such as Bats Global Markets and Chi-X Europe Ltd.
Plus was being wound down and had told companies listed on its markets they needed to find an alternative venue.
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