Retail forex brokers IronFX and FXDD are said to be planning a merger, while at the same time an information occurred that the merged company is intending to go public on Nasdaq via a reverse takeover (RTO) deal with an unannounced listed company, as the online media LeapRate reported on Monday.
It is expected that the transaction should reach the value of the combined businesses at the range of $150 million – $225 million USD.
Tradation, the controlling shareholder of FXDD and an interdealer broking arm of Compagnie Financière Tradition, has already backed the transaction. The companies have gone through the first stages of reaching preliminary regulatory approval for the planned transaction. As a first step the companies have already begun a share swap combining 9.9% joint ownership. Keeping it under 10% will allow the companies to first announce the transaction, expected as early as later today, and later finalize all necessary regulatory approvals.
FXDD is a unit of interdealer broker Tradition, which is part of Switzerland-based Compagnie Financiere Tradition, a company listed on the Swiss stock exchange
The broker withdrew in February this year its US licenses for introducing broker (IB), forex firm, swap firm and a member of the US National Futures Association (NFA), according to the NFA register. In H2 2014, the largest US forex broker, Forex Capital Markets, or FXCM, acquired FXDD’s US clients. However, FXDD maintained its presence in the US, instead of exiting the country altogether.
The broker has a European division, FXDD Malta, which is licensed by the Financial Services Authority (FSA) of Malta.
RTO, also known as reverse initial public offering (IPO) or reverse takeover, occurs when a private company becomes exchange-listed by merging with or acquiring a publicly traded company, skipping the IPO-related processes. Unlike IPO, however, the completion of an RTO does not contribute with newly-collected funds.
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