CME Group Sweetens Bid For GFI Group To Fend Off BGC Partners

(RTTNews) - Futures exchange operator CME Group Inc. (CME) on Thursday sweetened its offer to acquire GFI Group Inc. (GFIG) as part of its efforts to fend off a rival bid from brokerage company BGC Partners, Inc. (BGCP).

Chicago, Illinois-based CME Group and New York-based GFI Group Inc. said they have revised their definitive agreements to increase the consideration payable to GFI Group stockholders. The consideration payable to GFI Group stockholders has been increased to $5.60 per share from $5.25 per share, and will be payable in a mix of shares of CME Group Class A common stock and cash.

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 UK and internationally.

Under the CME deal, the purchase price to be paid by a private consortium of GFI Group management for GFI Group's wholesale brokerage business was increased to about $282 million from $254 million in cash, along with the assumption of about $77 million of unvested deferred compensation and other liabilities. CME Group will contibute $9.5 million in additional stock consideration to GFI shareholders.

The GFI Group management consortium is led by current Executive Chairman Michael Gooch, CEO Colin Heffron and Managing Director Nick Brown.

The two companies noted that together, these new contributions deliver an about $37 million increase in the purchase price to all GFI Group stockholders. This excludes the shares held by the GFI Group Management Consortium through Jersey Partners Inc., which will not share in the $0.35 per share increase announced today and will only receive $5.25 per share.

The updated terms of the CME transaction have been approved by the GFI Group's board of directors upon the unanimous recommendation of a special committee. If approval of GFI Group stockholders is obtained, the companies 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.

BGC Partners said Wednesday 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 to acquire all of the outstanding shares of GFI to $5.60 per share. The company's latest takeover offer is $5.45 per share.

Howard Lutnick, CEO of BGC Partners, said, "Each of our offers has obviously been superior to those of CME and GFI management. The special committee of GFI must act in the best interest of all GFI shareholders and determine that our bid is superior to the proposed CME-GFI Management transaction."

BGC Partners' tender offer will expire on January 27, 2015, unless extended.

CME is trading at $84.97, down $0.04 or 0.05 percent on a volume of 183,816 shares. GFIG is trading at $5.57, up $0.12 2.20 percent on a volume of 18,682 shares.