Michael Gooch Of JPI Urges Shareholders Of GFI To Vote In Favor Of CME Merger

(RTTNews) - Michael Gooch, the controlling stockholder of Jersey Partners Inc. or JPI, and Executive Chairman of GFI Group Inc. (GFIG), Tuesday issued an open letter to shareholders of GFI in support of the amended merger offer from CME Group (CME) to acquire all outstanding shares of GFI for $5.85 per share. Gooch urged shareholders to vote in favor of the CME Merger.

He said CME's offer is consensual and tax-efficient and ready to close, while BGC Partners, Inc.'s $6.10 offer was a highly conditional and hostile tender.

As part of the CME Merger, Gooch, who owns 36 percent of GFI, and Colin Heffron, Nick Brown will be buying GFI's interdealer brokerage business for approximately $287 million. They will also be taking on approximately $82 million in deferred compensation owed to GFI employees, bringing the total consideration to approximately $369 million. Gooch said the management consortium has made additional financial and commercial commitments to CME that are designed to maximize value for GFI shareholders.

In his open letter, Gooch said the $5.85 price implies a market cap of $743 million for GFI. That is an 88% premium compared to GFI's share price on July 29, 2014, the day before the initial announcement of the CME Merger. Colin, Nick and Gooch will be paid $4.44 for each of GFI shares being sold through JPI.

He said his ex-wife, Diane Gooch, a significant stockholder of GFI, is willing to take a reduced sales price for her more than 15 million shares. She has agreed to accept $5.46 for each of her GFI shares that will be sold through JPI.

He noted that BGC still has not signed a non-disclosure agreement with the standard no-solicitation, no-poach, and no-hiring conditions necessary to protect GFI from a raid on its employees. Gooch believe that BGC's hair trigger conditionality is unlikely to be satisfied given its inability to do due diligence without such a customary NDA in place. Further, he noted that BGC's tender offer remains highly conditional. He also opined that even if BGC reaches the 45% tender threshold, there is no assurance or guarantee that the shareholders will receive $6.10.