One weary Tullett insider says: “When GFI’s stock was at $105 it was: ‘GFI is buying Tullett.’ Now [GFI is] back at $85 and we’re pushing [Tullett] back up towards £5 it’s: ‘Tullett is buying GFI’. I think with so little love lost between the two organizations it’d be a tough one to broke. In December, Colin Hefron [president of GFI] had all the top boys in London into a room and gave a lengthy presentation on GFI: where they were going and why they would never do a deal with Tullett Prebon. Could be the ‘vote of confidence from the board’ before they sack the manager, but it feels unlikely.”
This bit of buzz has been going around on a regular basis for several years. It is believed that a major sticking point is the relative valuations of the two companies. Tullett is trading on a relatively measly future P/E ratio of around 13, while GFI’s is a hefty 30.6. I have no idea how reliable the latest talk is. But one day it might prove true, so I’m running the story just in case that day is today.