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BGC Partners, Inc. (NASDAQ: BGCP), a leading global brokerage company primarily servicing the financial and real estate markets, today announced that it has increased its fully financed, all-cash tender offer to acquire all of the outstanding shares of GFI Group Inc (NYSE: GFIG), the NYC based provider of brokerage services, trade execution, market data, trading platforms and other software products to $5.45 per share.
The tender offer is scheduled to expire at 5:00 pm New York City time on January 6, 2015, unless extended. As previously disclosed, the company has also reduced the minimum tender condition to 45% of the outstanding shares of GFI common stock, inclusive of the approximately 13.4% of GFI shares that BGC currently owns. BGC’s offer had previously required that at least 50% of GFI’s outstanding shares on a fully diluted basis be tendered. The conditions regarding control of GFI’s board remain part of the tender offer.
BGC’s revised offer of $5.45 per share represents a premium of $0.20, or approximately 4%, to the $5.25 per share stock and cash transaction announced by CME Group Inc. (NASDAQ: CME) and GFI on December 2, 2014 and a premium of more than 75% to the price of GFI shares on July 29, 2014, the last day prior to the announcement of the original CME transaction.
Howard Lutnick, Chairman and Chief Executive Officer of BGC, said: “Our $5.45 per share all-cash offer is obviously superior to CME’s stock and cash proposal. We have received approval from the FCA in the UK to acquire control of GFI and also gained early termination of the waiting period under the Hart-Scott-Rodino Antitrust Act, among other approvals, and have no other regulatory impediments to closing. Our offer is fully financed and has no financing condition. We are therefore prepared to deliver $5.45 per share in cash to GFI shareholders immediately after the close of our tender offer. Our revised offer provides GFI shareholders with a substantial premium and immediate liquidity and demonstrates our commitment to completing this compelling transaction.
“In comparison, the more complex series of transactions proposed by the CME continue to involve severe conflicts of interest on the part of GFI’s management team. Neither CME nor GFI have announced any regulatory approvals. GFI Group is rated significantly below investment grade, while the wholesale brokerage business that GFI’s management team hopes to purchase will be highly levered and is expected to pay interest rates on its debt of up to 15% per year. These factors could significantly impact GFI’s and its management’s attempts to meet regulatory capital and other requirements and obtain regulatory approval of their transaction on a timely basis, or at all. Therefore, GFI cannot say with certainty when its shareholders can expect to receive payment from CME.
“Simply put, our revised offer is better for GFI shareholders when compared to the CME/GFI management agreement in every way – value, speed, and certainty. We urge GFI shareholders to tender their shares.”
Mr. Lutnick continued: “We also believe that our offer is superior from the point of view of GFI’s other constituencies, and that GFI’s customers, trading counterparties, regulators, vendors, brokers, and support staff would all prefer that GFI’s wholesale brokerage become part of a much larger, better capitalized, and more diversified company.
“We also remain confident that BGC’s stockholders and bondholders will benefit from a combination of GFI and BGC, as it will result in increased productivity per broker and meaningful synergies, which should enable us to increase revenues, profitability, and cash flows, while maintaining our investment grade rating.”
Mr. Lutnick concluded: “Following the close of BGC’s tender offer and based on the proposed terms, RSUs held by GFI employees will remain outstanding and vest on their existing schedules. We also remain open to seeking a friendly and negotiated transaction with GFI’s independent board members and/or CME involving the electronic assets of GFI or the entire company. We also remain open to conversations with GFI management regarding matters related to such agreements and have continued to seek a negotiated arrangement with GFI’s independent board members.”
The full terms and conditions of BGC’s tender offer are set forth in the offering documents that the Company filed with the Securities and Exchange Commission (SEC) on October 22, 2014, and as have been and may be amended from time to time.
Innisfree M&A Incorporated is the Information Agent for the tender offer and any questions or requests for the Offer to Purchase and related materials with respect to the tender offer may be directed to them, toll-free at (888) 750-5884.
BGC’s financial advisor and dealer manager for the tender offer is Cantor Fitzgerald & Co. and its legal advisor is Wachtell, Lipton, Rosen & Katz.