BGC Boosts Tender Offer To Buy GFI To $5.45 Per Share

(RTTNews) - BGC Partners Inc (BGCP), a brokerage company servicing the financial and real estate markets, on Friday raised its unsolicited cash tender offer to buy all of the outstanding shares of GFI Group Inc (GFIG) to $5.45 per share, up from the prior offer of $5.25 per share.

The increased tender offer is yet another attempt by BGC to thwart an agreed-upon $5.25 per share stock and cash merger deal between GFI and CME Group Inc (CME).

BGC said its revised tender offer of $5.45 per share represents a premium of $0.20, or about 4%, to the $5.25 per share stock and cash transaction announced by CME Group Inc (CME) and GFI on December 2 and a premium of more than 75% to the price of GFI shares on July 29, the last day prior to the announcement of the original CME transaction.

BGC had commenced a tender offer of $5.25 per share offer for GFI in October but that was rejected by GCI. BGC said its new offer is scheduled to expire on January 6, 2015.

In July, CME agreed to by GFI for $4.55 per share in an all stock deal, and in October, BGC entered the fray, with an unsolicited tender offer to buy GFI for $5.25 per share. Later, on December 2, CME increased the offer to buy GFI for $5.25 per cash and stock.

Commenting on the increased tender offer, BGC Chief Executive Howard Lutnick said the new tender offer is superior to CME's cash and stock proposal.

Lutnick said that BGC has obtained approval from the FCA in the UK to acquire control of GFI and has no regulatory impediments, while neither CME nor GFI have announced any regulatory approvals.

Lutnick further said that GFI 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," Lutnick said.

Also, BGC reiterated it has reduced the minimum tender condition to 45% of the outstanding shares of GFI common stock, inclusive of the about 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.

Lutnick said that BGC stockholders and bondholders will benefit from a combination of GFI and BGC, as it will result in increased productivity per broker and meaningful synergies.

Lutnick also said that GGC remains 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.

BGCP is trading at $8.78, down $0.06 or 0.68%, on the Nasdaq.

GFI is trading at $5.49, up $0.01 or 0.18%, on the NYSE.