In a move that could further dampen the appeal of the London Stock Exchange, TP ICAP, the City’s top inter-dealer broker, has revealed that it is considering listing its data business, Parameta Solutions, in the United States. This potential New York float could value the data group at more than $1 billion, marking a significant setback for the London stock market, which has been grappling with a sharp decline in initial public offerings since the beginning of 2022.
The decision by TP ICAP to explore a US listing for Parameta is particularly noteworthy, given the company’s prominence in the City. Formed through the merger of fierce rivals Tullett Prebon and the phone-based broking business of Icap eight years ago, TP ICAP has established itself as the world’s largest inter-dealer broker, facilitating transactions in financial markets.
Parameta Solutions, a high-margin unit within TP ICAP, specialises in selling data on over-the-counter markets, such as energy, credit, and derivatives, while also administering benchmarks and indices. The company’s interim results, released on Wednesday, showed that Parameta’s revenues increased by 7% year-on-year to £97 million, contributing 8% of the £1.1 billion generated by the wider group in the first half of the year. TP ICAP cited the fact that Parameta’s peers are listed in the US and that 95% of the business’s revenues are dollar-denominated as reasons for considering a US listing.
The company stated, “The US is the deepest and most liquid market globally and has a large financial data sector, with an ecosystem of specialist investors and analysts who have a deep understanding of the industry and drivers of valuation.” The potential listing of Parameta Solutions in the US has been met with excitement from investors, who have long viewed the unit as a hidden gem within TP ICAP. The news, along with strong interim results and the announcement of a £30 million share buyback, propelled TP ICAP shares up by 16½p, or 7.8%, to close at 227½p, giving the company a market capitalisation of more than £1.7 billion.
The London Stock Exchange’s struggle to attract new listings has prompted City regulators and the government to implement a series of reforms aimed at making Britain a more attractive destination for companies seeking to go public. These measures include a revamp of the listing rules, which came into effect last month. However, the potential loss of Parameta Solutions to the US market underscores the challenges that lie ahead for the London Stock Exchange in its bid to remain competitive on the global stage. Tags: TP ICAP, Parameta Solutions, London Stock Exchange, New York Stock Exchange, Financial Markets, Data Business
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