Global broker BGC Partners has launched a bid for all of the
outstanding shares of GFI Group, offering $5.25 per share in a
transaction that values the business at around $675m.
The offer represents more than a 15% premium on the $4.55
per share deal the Chicago-based exchange and GFI agreed on
July 30, and more than a 68% premium to the price of GFI's
share on July 29.
CME Group had agreed to acquire GFI Group before spinning
off the IDB to management and retaining the group's other
assets, which include Trayport and Fenics.
"Our offer provides a materially higher, all cash price to
GFI shareholders, delivering a substantial premium and
immediate liquidity," said Howard Lutnick, chairman and CEO of
"We believe that GFI's customers and brokers would benefit
from GFI being part of a larger, better capitalized and more
"We are confident that a combination of GFI and BGC will
produce increased productivity per broker, meaningful synergies
and significant cost savings."
If the merger between BGC and GFI goes forward, BGC would
become one of the world's largest brokers. The counter-offer
could create a bidding war for GFI Group between CME and
CME plans to sell off GFI’s brokerage and
clearing services to a consortium of GFI managers for $165m,
plus $63m in liabilities, which could effectively take
GFI’s potentially lucrative swap execution
facility (Sef) business private.
Both CME and GFI face legal action from a GFI stockholder
and are accused of deliberately undervaluing the
However BGC plans to bid for 100% of all the outstanding
shares of GFI, which will mean the merger will include
GFI’s brokerage and clearing business, as well as
According to one source close to the matter: "It seems to me
the whole IDB industry is in play for consolidation. Could be
an interesting year."
BGC plans to take its all-cash offer directly to
shareholders, rather than through the management.
In a letter to the board of directors of GFI, Shaun Lynn,
president of BGC wrote: "Given your lack of response to our
offers, and our belief that the pending transaction deprives
GFI shareholders of the opportunity to realize appropriate
value, particularly given the significant discount agreed to
with respect to the purchase of the brokerage and clearing
business, we intend to make an offer directly to the GFI
The IntercontinentalExchange was also said by sources to be
interested in acquiring Trayport but has not bid or declined to
comment on the rumours.
BGC currently owns around 13.5% of GFI Group's common
The US broker has also said it is willing to negotiate with
the both the GFI management and the CME regarding a consensual
"We are open to discussing and addressing social issues such
as senior management team composition and other concerns that
you may have. We are available to commence such discussions
immediately and hope that you accept our invitation to do so,"