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UPDATE (2) – It seems logical for Gulf Merchant to return to the table now and sell the SX direct to Icap. With confirmation of Misra’s interest in SX and DX now seeing potential acquirers, at the current price the shares still trade at cash value. Any Venture Capital company worth their salt could generate a 2 – 3 times return on investment with a clean 1.25p bid.

UPDATE – Icap have put the marker down now for Plus SX now. I’d be surprised if the LSE or GXG don’t return. The ‘dream’ scenario now the losses within Plus will be stemmed is for Misra (of Chi-X fame) to replace Theret as CEO and Trading Solutions be allowed to gain the traction that was starting in early part of this year. The documentation I have indicates that TS could be a £15-20m turnover business inside 2 years.

ICAP, the world’s largest interdealer broker by market capitalisation, is in talks to buy Plus Markets SX – the cash equities side of Plus Group – the U.K. exchange for fledgling companies that was planning to close after failing to secure a buyer. The London-based broker has been talking to the Financial Services Authority and the Plus board about a deal that would initially preserve the quotations of the 156 companies traded on the market.

A disposal of the loss making side, although for a nominal sum, will change the profile of the Group. Current cash is widely deemed to equate to 0.75p per share and with Harinder Misra tipped to be interested in the TS ‘Exchange in a box’ division, there is the potential for this to be sold off seperately or concentrate on this going forward (hopefully minus ThereT & Basing!). There was talk that 2 major insititutions were ready to sign up for this service in the early part of the year with 7 figure sums involved for each contract

The question now is will Gulf Merchant Bank return to the fray and this finally kick off an auction that puts a proper value on the business and which has been estimated at upto £12-15m?

With the company’s current cash value estimated at 0.7p per share the market still refused to ascribe any value to TS or DX (the latter alone which received a £1.5m offer in the early part of the year). With over 10% of the float turned over this morning, any swelling in this volume could indicate stakebuilding – with the shares not officially in an offer period at this point then any potential Group bidder could accumulate stock without being detected.

It looks likely to us that the other parties that had been sitting on the sidelines will probably return to the the table now there has been a ‘first mover’. For Plus shareholders, things just got interesting…

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