Broker TP ICAP shares jump 11% after U.S. hedge fund urges sale

(Reuters) - Shares of the world’s largest inter-dealer broker TP ICAP jumped as much as 11% on Wednesday after U.S. hedge fund Phase 2 Partners asked the British company to explore a sale.

Phase 2 Partners, which holds 7.7 million shares in the TP ICAP, urged the London-listed company to look for a new ownership structure through a potential sale or merger with another global trading platform.

“I currently see your shares as significantly undervalued, believe management’s lack of stock ownership represents a significant governance failure... and believe the company needs to make decisive steps immediately to benefit long suffering shareholders,” Justin Hughes, founder of Phase 2 Partners, said in a letter dated March 22.

A spokesman for TP ICAP in response said the company was maintaining an active dialogue with its investors and is “focused on delivering value to shareholders”.

In the letter published on Wednesday and addressed to TP ICAP Chairman Richard Berliand, the hedge fund also urged the company’s board members to take all compensation in the form of equities.

Shares of the company, which matches buyers and sellers of securities, lost 28% of its value in 2021 and are down more than 12% this year as of Tuesday’s close.

Reporting by Sinchita Mitra and Yadarisa Shabong in Bengaluru; Editing by Amy Caren Daniel