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Smith Likely to Head Merged Tullett/GFI Group: Reports

Tullett Prebon’s CEO Terry Smith and chairman Keith Hamill are likely to retain their positions in a combined Tullett/GFI Group entity if the merger goes ahead, according to media reports last week.

London-based Smith, who holds about a 4% stake in interdealer broker Tullett will take the lead role despite GFI chief executive Mickey Gooch’s much larger stake in the new entity, according to Reuters.

New York-based Gooch, who would hold roughly 22% in the enlarged group, is likely to take an executive deputy chairman role, while GFI President Colin Heffron would become the chief operating officer. Both Tullett and GFI declined to confirm the roles or comment on the reports.

The deal, expected to complete within six weeks, would create a bigger firm to keep pace with the world’s largest interdealer broker, Icap. The combined entity would be the largest interdealer broker, measured by staff numbers, and the second largest in terms of revenues and profits. 

Tullett generated revenues of about $1.5 billion in 2007 while those of GFI came in at $970.5 million. Icap’s revenues were equivalent to about $2.6 billion in the financial year ending 31 March.

Analysts estimate the combined group should create synergies of $40 million in 2009 and $80 million in 2010.

The two companies held preliminary merger talks in July 2007 a GFI spokesperson confirmed to Squawkbox in November, but they were broken off because the two could not come to a mutually satisfactory conclusion.

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