PLUS Markets Group, the UK exchange operator, has offered itself for sale to strengthen its balance sheet and expand recently launched initiatives.
Based on its prevailing stock price at the time of going to press, PLUS has a market capitalisation of £4.3 million.
In light of falling SME issuance and dwindling trading volumes, PLUS launched two new services last year in an attempt to diversify its business.
PLUS-DX received regulatory approval last July to operate as a derivatives exchange for institutional investors. It offers a swap index contract, an instrument that tracks the P&L of the underlying US dollar interest rate swap (IRS) market for tenors between two and 30 years, at a lower cost to the investor. However, the platform is yet to see a single trade and restructured its management at the end of 2011 following an bid from an unnamed suitor that was rejected by PLUS
PLUS has also formed PLUS-TS, a trading technology unit, in conjunction with former Chi-X Europe COO Hirander Misra, which develops trading platform technology compliant with upcoming European regulation.
Sources have also suggested that the sale of its individual businesses could work out to be more profitable for the group. The PLUS-DX market could be attractive to an inter-dealer broker looking to take advantage of regulatory change in the OTC derivatives space, while PLUS-TS could be attractive to a trading venue in need of next-generation technology. PLUS-SX, the group's SME market, will offer the opportunity for a firm to obtain a recognised investment exchange licence.
PLUS Markets Group is AIM listed and 17% owned by Amara Dhari Investments, a Middle-East-based investment vehicle that took its stake in the firm in September 2009.
“The board of directors recognises that scale and international reach will become increasingly relevant for interaction with exchanges, investment banks and other trading entities,” read a statement from PLUS Markets Group. “The Board believes that it is in the best interests of the company to seek a partner which will help it achieve the scale and reach required to maximise value to stakeholders.”