Talks: Former Tory treasurer Michael Spencer set up Nex Group more than 30 years ago
City veteran Michael Spencer is in talks to sell the business he set up more than 30 years ago in a deal that would net him hundreds of millions of pounds.
The 62-year-old, a former treasurer of the Conservative Party, still owns a 17.6 per cent slice of financial technology firm Nex Group.
The London-based company was worth £2.5billion when the stock market closed last night, valuing Spencer’s stake at £448.5million.
But shares could now soar –pushing up the value of the company and Spencer’s holding – after Nex last night said it was approached by US trading giant CME Group about a takeover.
‘Discussions are at an early stage and there can be no certainty that an offer for Nex will be made, nor as to the terms of any offer, if made,’ Nex said after the stock market closed.
Analysts said interest from CME, which owns the Chicago Mercantile Exchange and other large markets, could trigger a bidding war for Nex.
Possible rivals are thought to include the London Stock Exchange, Deutsche Boerse and New York Stock Exchange owner Intercontinental Exchange (ICE).
THE £800M PIONEER
- Michael Spencer made £30,000 from trading while still at Oxford University
- He was fired from his first two jobs for trading errors, set up on his own in 1986, and is now worth £800million
- Spencer is known for throwing lavish parties – flying 150 friends to £1,000-a-night hotels in Morocco for his 60th birthday
- The father of three invented a charity day where celebrities man the phones, which has raised £140million since 1993
- The former Tory treasurer reportedly had his peerage blocked after his firm was fined £55million for rigging Libor rates. He was not implicated
- He is married to second wife Sarah, ex-wife of the Marquess of Milford Haven
Arnaud Giblat, an analyst at Exane BNP Paribas, said they were all ‘credible and high likely interested acquirers’ of Nex.
He said: ‘Nex has stated in the past that it would try to go it alone to grow its business.
‘However, we believe selling at a high premium could make sense.’
He added a takeover of Nex could see ICE bid for the LSE.
Spencer has previously warned a hostile takeover of Nex would be ‘very difficult’ because of his holding, meaning any bidder would have to pay enough to get him on-side.
The sale of Nex at a large premium to last night’s closing share price of 670.5p would trigger an even bigger windfall for Spencer than the current value of his shares.
The company dates back to 1986 when Spencer founded a broking firm that became known as ICAP.
He sold ICAP’s voice-broking business to rival Tullett Prebon in 2016 and has since sold his share of that business for £400million.
ICAP’s electronic trading business was split into a separate firm called Nex, where Spencer is still the boss.
CME boss Terry Duffy has turned his firm into a trading powerhouse. It has done deals with the Chicago Board of Trade and New York Mercantile Exchange.