Tullett, ICAP restructuring of deal gets nod from U.S. Justice

WASHINGTON (Reuters) - The U.S. Department of Justice said on Thursday that a restructuring of Tullett Prebon Plc’s proposed $1.5 billion acquisition of ICAP Plc’s voice-broking business addresses its concerns that the deal would create an interlocking directorate.

Under the original deal structure, ICAP would have owned 19.9 percent of Tullett Prebon, a British interdealer broker, and had the right to nominate a member of Tullett Prebon’s board of directors. Because the companies would have continued to be competitors, the Justice Department said it was concerned that ICAP’s ability to nominate a Tullett Prebon board member would have violated the Clayton Act provision on interlocking directorates.

“The revised agreement will provide that ICAP will not own any part of Tullett Prebon after the transaction and will have no right to nominate a member of Tullett Prebon’s board of directors,” the Justice Department said in a statement.

ICAP, a British broker, in June offered to sell its London-based oil desks to address competition concerns raised by Britain’s competition watchdog, the Competition and Markets Authority. The CMA said it had until Aug. 16 to decide if the proposed sale would satisfy its concerns, or if it would refer the deal for further investigation.

In its trading statement on Wednesday, ICAP said the deal with Tullett Prebon was on track to complete later this year. Interdealer brokers, which match buyers and sellers of currencies, bonds and other tradable instruments, have been hit in recent years by regulation designed to rein in the riskier trading activities of their traditional investment bank clients.

Reporting by Tim Ahmann in Washington and Rama Venkat Raman in Bengaluru; Writing by Mohammad Zargham; Editing by Leslie Adler