Strong interest in Creditex

A range of potential trade buyers has emerged for fast growing credit derivates broker Creditex, whose major shareholder is TA Associates. The private equity firm has a strong presence in financial services businesses, having owned Ameritrade, Instinet and IntercontinentalExchange (ICE).

Last October, Creditex received inquiries from potential buyers. The company appointed Evercore to handle a possible sale of the business. Now a source familiar with the situation said that a first round of bidding had concluded, with “many of the obvious trade buyers” put forward for the next round. This is expected to conclude towards the end of March.

Likely purchasers could be interdealer brokers such as Tullett Prebon or ICAP as well as exchanges such as ICE or CBOE, which is in the process of being demutualised. It is not thought that the CME, which bought CBOT last year and is currently circling Nymex, would be interested.

One analyst said that Creditex was growing more quickly than quoted competitor GFI Group, which said revenues rose 25% in this area last year. “If an exchange bought Creditex, it would be like Euronext buying Liffe. In retrospect that was a steal, as Liffe has grown tenfold since then.”

Creditex was set up in 1999 by a former Deutsche Bank trader. Banks are still believed to be invested in the business, including JP Morgan, alongside TA.

The credit derivatives market has seen huge volumes in recent months amidst the current market volatility.