Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Tullett Buys Oil Broker PVM for $160 Million

Tullett Prebon Plc CEO Terry Smith
Tullett Prebon Plc, run by Terry Smith, will pay an initial $112 million in stock for PVM and a further $48 million subject to it meeting revenue targets over the next three years, Tullett Prebon said in a statement today. Source: Tullett Prebon via Bloomberg

May 9 (Bloomberg) -- Tullett Prebon Plc, facing a decline in revenue, agreed to buy oil broker PVM Oil Associates Ltd. for $160 million, and said it plans to eliminate jobs.

The broker, run by Terry Smith, will pay an initial $112 million in stock for PVM and a further $48 million subject to it meeting revenue targets over the next three years, London-based Tullett Prebon said in a statement today.

Tullett is making the acquisition as what it called “persistently low” volatility as well as increased regulation of its customers and the U.S. over-the-counter derivatives market crimps income. Revenue in the first four months fell 12 percent to 248 million pounds ($419 million) at constant exchange rates.

Tullett said the acquisition will allow it to expand in the energy industry and bolster its position in the market for crude oil, the world’s most actively traded commodity.

The job reductions will help the firm reduce annual costs by about 20 million pounds. The cuts will lead to a one-time charge of 20 million pounds, half of which the company will book in 2014. Spokesman Nigel Szembel declined to comment on how many jobs the company plans to eliminate.

PVM’s 30 oil-brokerage desks handle futures and over-the-counter contracts for more than 100 million barrels a day worldwide, according to the company’s website. It employs 180 people, including 70 OTC and 14 futures brokers. It deals in both crude oil and refined fuels.

Capital Burdens

“In the light of the rising technology, regulatory and capital burdens facing the industry it is the appropriate time to come under the umbrella of a larger organization,” David Hufton, the company’s managing director, said in an e-mailed statement. “The transaction will enable PVM to make further strides in expanding its presence not only in the global oil markets but into the other commodity markets.”

The deal has unanimous backing of PVM’s shareholders, who are all employees committed to staying with the firm, Hufton said.

Tullett Prebon fell 5.9 percent to 297.20 pence in London trading, for a market value of about 647 million pounds.

To contact the reporters on this story: Jesse Westbrook in London at jwestbrook1@bloomberg.net; Lananh Nguyen in London at lnguyen35@bloomberg.net

To contact the editors responsible for this story: Edward Evans at eevans3@bloomberg.net Alaric Nightingale, Sharon Lindores

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.