ISS Recommends GFI Shareholders Vote Against Merger With CME - Quick Facts

(RTTNews) - BGC Partners Inc. (BGCP) announced that Institutional Shareholder Services or "ISS", a leading independent proxy advisory service, has recommended that shareholders of GFI Group Inc. (GFIG) vote AGAINST the merger agreement with CME Group Inc. (CME) at the special meeting of GFI shareholders scheduled for January 27, 2015.

Howard Lutnick, Chairman and Chief Executive Officer of BGC, said, "We are pleased that, after thorough and independent analysis, ISS recognizes the economic inferiority and conflicted nature of the proposed CME-GFI management $5.85 stock and cash transaction, as well as the economic superiority of BGC's $6.10 all-cash offer. We also note that ISS recommends that GFI shareholders tender their shares to BGC as long as the CME-GFI management bid remains below our offer price."

In its analysis, ISS noted the following regarding the proposed CME transaction: "As the proposed transaction is economically inferior to the unsolicited all-cash competing offer, yet it is not at all clear that unaffiliated shareholders incur any greater downside risk in holding out for the economically superior offer from this ongoing bidding war, shareholders should vote AGAINST the proposed transaction on its current terms….and, if that offer does not improve to at least parity with the BGC bid, tender into the BGC offer instead..."

On Tuesday, BGC Partners said that it increased its fully financed, all-cash tender offer to acquire all of the outstanding shares of GFI Group to $6.10 per share. BGC Partners also extended the expiration date for the tender offer to 5:00 PM ET on February 3, unless extended.

BGC's revision to its cash offer of $6.10 per share represents a premium of $0.25, or about 4%, to the $5.85 per share stock and cash consideration offered by the CME Group Inc. and GFI management.

Additionally, BGC said that is delivering an executed agreement to the board of GFI 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 by an additional $0.10 per share.

The proposed revision to $6.20 per share would represent a premium of $0.35, or about 6%, to the $5.85 per share stock and cash consideration offered by CME and GFI management.