LONDON ICAP (IAP.L), the world's largest inter-dealer broker, has raised its offer for PLUS Stock Exchange PMK.L to 500,000 pounds ($780,000) from a nominal 1 pound in a last-ditch attempt to win over shareholders.
ICAP said on Thursday it had raised its offer "to insulate shareholders from the costs of certain contractual payments triggered by the sale of PLUS".
"ICAP has decided, after listening to the concerns expressed by PLUS Markets Group shareholders, to increase the purchase price for PLUS to 500,000 pounds," it said in an emailed statement.
There has been growing opposition to the ICAP takeover from PLUS Markets Group (PMG) shareholders ahead of their vote on ICAP's proposal on Monday.
PMG owners argued the ICAP plan "gives shareholders nothing but rewards obscenely PLUS directors and advisers".
ICAP stressed on Thursday that British market regulator the Financial Services Authority will revoke PLUS's exchange license if its deal is not struck by next Thursday.
PLUS said last Friday the proposed sale to ICAP, which was agreed between its management and the broker last month, remained "in the best interests of shareholders".
ICAP's takeover is central to the broker's plan to move aggressively into futures trading for the first time and tackle the dominance of the NYSE Euronext NYX.N and Deutsche Boerse (DB1Gn.DE) exchanges.
Analysts view the deal as a move by the broker to pay a cut price for PLUS's exchange license, a potentially attractive asset as global regulators look to force more of ICAP's core over-the-counter derivatives markets to use exchanges.
"This is a sweetener for PLUS shareholders that ICAP hopes will allow it to take ownership of an asset that while loss making could be strategically important given regulatory changes in derivatives trading," said Richard Perrott, an analyst at Berenberg Bank.
Policymakers in the United States and Europe are keen to implement reforms that will make derivatives trading more transparent and competitive, a move that presents new opportunities to exchange operators.
(Editing by Elaine Hardcastle and Mark Potter)