Plus Markets, the loss-making stock exchange, has agreed to merge with Project Turquoise, the pan–European share trading platform, through a reverse takeover.
Plus requested that its stock be frozen after striking a "non-binding heads-of-terms agreement with a third party".
The exchange did not name its partner, but it is understood to be Project Turquoise, the trading platform that a group of seven investment banks have been trying to launch for nearly a year.
The new venture would be led by Simon Brickles, the Plus chief executive and former head of the Alternative Investment Market, the highly successful junior market owned by the London Stock Exchange.
The deal is a boon for both companies. Plus was meant to challenge AIM but has struggled, in part because of its heavy reliance on membership fees rather than per-trade charges. Last month, it abandoned membership fees and introduced trade execution charges.
The company reported an operating loss of £1.47m on turnover of just £1.68m in its interim earnings last month.
Bringing Turquoise into the fold could inject Plus with a greater sense of legitimacy via the support of Turquoise's backers, which include banking giants such as Goldman Sachs, Merrill Lynch and Deutsche Bank.
For Turquoise, combining with Plus would give it the two things it has been unable to find until now. The nascent project was in search of not only a technology platform but a chief executive as well. By reversing into Plus, it would fill both vacancies.
Plus uses OMX's technology platform, seen as the best in the business, and Mr Brickles would lead the business. The agreement could revitalise a project that has been slow to take shape since the banks first revealed their plan last November, which they painted as a reaction to high fees charged by the LSE and other established exchanges.Reuse content