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Man Group Moves to Spin Off Brokerage Arm: CNBC's Gasparino

Man Group has taken its first steps toward spinning off its brokerage arm through an initial public offering that could be one of the largest in Wall Street history, CNBC's Charlie Gasparino has learned.

The UK-based asset management company has been interviewing investment banking firms to serve as underwriter for an IPO that could take place by the middle of this year, possibly as early as late spring, Gasparino said.

The deal still needs approval from the company's board. But based on the company's conversations with Wall Street bankers, people close to the firm told Gasparino that a deal in the $5 billion to $7 billion range is likely in the coming months.

The largest U.S.-based IPO was completed for AT&T in June 2000 totaling $10 billion. If the Man Group hits the upper-end of its possible range, it would rank as the thrid largest IPO in the U.S., behind the Kraft Foods in June 2001 for $8.7 billion, according to Thomson Financial.

The largest deal on record, according to Thomson, was the $11.2 billion IPO for the Bank of China in May of last year.

Bidding among the Wall Street firms for the underwriting slots is expected to be fierce, Wall Street executives with knowledge of the matter told Gasparino.

Traditionally, Goldman Sachs has been among to the top firms specializing in such issues. But the big Wall Street investment bank may run into some trouble with Man because of Goldman's ties to Refco, which sold its futures business to Man after filing for bankruptcy only two months after its August 2005 IPO, Gasparino said.

Goldman was one of the lead underwriters for Refco's IPO and was criticized for failing to provide enough due diligence to undercover the financial problems that led to Refco's bankruptcy filing. A Goldman spokesman declined to comment.