CME Group Again Sweetens Bid For GFI Group

(RTTNews) - Futures exchange operator CME Group Inc. (CME) on Tuesday again sweetened its offer to acquire GFI Group Inc. (GFIG) as it attempts to fend off a rival bid from brokerage BGC Partners, Inc. (BGCP).

Chicago, Illinois-based CME Group said it has delivered executed revised agreements to the special committee of the board of directors of New York-based GFI Group that, if approved, would increase the consideration payable to GFI Group stockholders.

The consideration payable to GFI Group stockholders has now been increased to $5.85 per share from $5.60 per share, and will be payable in a mix of shares of CME Group Class A common stock and cash.

The revised offer represents a premium of more than 88 percent over the GFI Group's closing stock price of $3.11 per share on July 29, 2014, the last day of trading prior to the announcement of the CME transaction.

GFI Group provides wholesale brokerage, clearing, and electronic execution and trading support products as well as services for financial markets in the U.S., the U.K. and internationally.

Under the CME deal, a private consortium of GFI Group management will acquire the GFI Group's wholesale brokerage business. The GFI Group management consortium is led by current Executive Chairman Michael Gooch, CEO Colin Heffron and Managing Director Nick Brown.

CME said that as part of its revised offer, the GFI management consortium and certain affiliates have now agreed to forego a total of about $40 million in consideration that would otherwise be payable to them in the transaction. CME said it will pass along this foregone consideration in its entirety to GFI stockholders and is not contributing any additional consideration as part of this revised offer.

The transaction remains subject to approval by GFI Group's stockholders. GFI Group will hold a special meeting of its stockholders on January 27, 2015 to vote on the CME transaction. If the deal is approved by GFI stockholders, the parties expect the transaction to close shortly thereafter.

New York-based BGC Partners and CME Group are engaged in a bidding war for GFI Group since September 2014.

In late July, CME Group said it agreed to acquire the pricing-and-data business Fenics and energy-trading platform Trayport of GFI Group. In a two-step transaction, CME would first acquire GFI Group. Then, a consortium of GFI Group management would acquire GFI Group's wholesale brokerage and clearing businesses.

BGC Partners, which has a 13.4 percent stake in GFI Group, said last Thursday that it has delivered an executed agreement to GFI Group that, if countersigned by GFI, provides that BGC would increase its fully financed, all-cash tender offer for all of the outstanding shares of GFI to $5.85 per share. BGC Partners' tender offer will expire on January 29, 2015, unless extended.

CME is trading at $86.23, up $1.19 or 1.4 percent on a volume of 198,873 shares. GFIG is trading at $5.79, up $0.19 or 3.39 percent on a volume of 17,382 shares.