BGC Partners intends to commence a tender offer to acquire all of the outstanding shares of GFI Group for USD5.25 per share in cash in a transaction valued at approximately USD675 million.
BGC currently owns approximately 13.5 per cent of GFI Group's common stock.
BGC'S offer of USD5.25 per share in cash represents more than a 15 per cent premium to the USD4.55 per share all-stock transaction announced by CME Group and GFI Group on 30 July 2014 and more than a 68 per cent premium to the price of GFI Group shares on 29 July, the last day prior to the announcement of the CME transaction.
Howard Lutnick, chairman and chief executive officer of BGC, says: "Our offer provides a materially higher, all cash price to GFI shareholders, delivering a substantial premium and immediate liquidity. On a combined basis, BGC and GFI are expected to become one of the world's leading financial services brokers, with enhanced global reach and expanded capabilities. We believe that GFI's customers and brokers would benefit from GFI being part of a larger, better capitalised and more diversified company. We are confident that a combination of GFI and BGC will produce increased productivity per broker, meaningful synergies and significant cost savings. We believe that our proposed transaction will drive substantial earnings for BGC stockholders, as well as superior service for our customers.
"Our significant ownership position in GFI Group reflects our confidence in and commitment to our transaction."
BGC believes the pending transaction with CME deprives GFI shareholders of the appropriate value of their investment, because GFI management and its board approved a transaction that allows GFI management to purchase the brokerage business from CME at a discount.
BGC says it remains willing to engage directly with the board of GFI Group to negotiate a transaction. However, GFI Group's prior refusal to engage in such discussions requires BGC to take its offer directly to shareholders.
BGC's tender offer will be conditioned on the tender of a sufficient number of shares of GFI common stock such that, when added to the GFI common stock owned by BGC, BGC would own a majority of the outstanding shares of GFI common stock on a fully diluted basis. The tender offer will not be subject to any financing condition.
Cantor Fitzgerald & Co. is serving as financial advisor to the company, and Wachtell, Lipton, Rosen & Katz is serving as the company's legal advisor.
