Investment Technology Group (ITG), an Irish registered company operating out of the International Financial Services Centre in Dublin that provides technology-based equity trading services, is in talks to acquire E-Crossnet (EXN), a European equities crossing network used by the investment community for the trading of stocks.
The conclusion of talks will lead to ITG buying out all of EXN’s 13 shareholders, including Barclays Global Investors and Merrill Lynch.
If the deal goes through ITG will offer professional investors in Europe an integrated equities crossing system with access to a greatly expanded liquidity pool.
ITG’s existing POSIT service is an equities crossing system that provides professional investors with transaction analysis tools. If the Dublin-based company succeeds in acquiring EXN it will be viewed in the marketplace as a strategic acquisition that will strengthen the company’s position as one of the greatest equities crossing platforms in Europe.
It is anticipated that a definitive purchase agreement will be executed by the year-end, subject to the completion of due diligence.
Alasdair Haynes, CEO of ITG Europe, commented: “ITG Europe pioneered the intraday equities crossing business in Europe and we have made it a success in the past six years. Crossing is now an integral part of the trading landscape and forms a key component of the Best Execution process. In seeking to add EXN to POSIT we will be able to give all clients a single and enhanced liquidity pool and access to ITG Europe’s professional trading desk and other tools and services.”
EXN is an equities crossing network operating in Europe and is used by the investment community for the trading of European stocks. EXN’s shareholders are: Barclays Global Investors, Baring Asset Management, Cazenove Fund Management Ltd, Deutsche Asset Management, Henderson Global Investors, Hermes Investment Management Limited, Legal & General Investment Management, Merrill Lynch Investment Managers, Schroder Investment Management, Standard Life Investments, State Street Corporation, UBS Global Asset Management and West LB Asset Management.
The potential acquisition was welcomed by EXN’s shareholders, including Merrill Lynch Investment Managers. Merrill Lynch CIO Peter Gibbs commented: “We fully support the creation of a single crossing network. By increasing liquidity, more trades will be matched and investors will see the benefit in lower transaction costs.”
Alan Brown, group CIO and co-head of State Street Global Advisors, added: “We’re a firm believer in the power of crossing networks for institutional investors to reduce trading costs and ensure best execution through transparency and efficiency. This deal will enhance liquidity and so enable more access to this network and that can only be a good thing.”
By John Kennedy