By Angela Chen
The bidding war between CME Group Inc. and BGC Partners Inc. for
fellow broker-dealer GFI Group Inc. escalated Monday, as both
parties raised their bids to win over shareholders ahead of this
month's vote.
CME is now offering $5.85 a share in cash and stock, while rival
BGC has raised its all-cash offer to $6.10 a share. BGC added that
it delivered an agreement that, if approved by GFI, means that BGC
would increase its offer by an extra 10 cents a share, or $6.20 a
share. BGC also has extended the expiration date for its offer to
Feb. 3.
"We are fully committed to completing this transaction and our
revised offer is clearly superior to the current agreement in place
between CME and GFI management," said BCG Chief Executive Howard
Lutnick.
CME and rival BGC have been locked in a bidding war over GFI
since last July. Brokers such as CME, BGC and GFI act as middlemen
for Wall Street's big banks.
GFI has supported the efforts of CME. But BGC, the
second-largest broker by market capitalization, went public with
its intention to launch a tender offer for the company in
September, after taking a 13.5% stake in GFI.
If the raised offer is approved at the Jan. 27 meeting, GFI
management and certain affiliates will forgo about $40 million in
consideration.
GFI rejected the BGC bid in November, calling it "highly
conditional" because of an impasse over issues such as board seats.
At that time, the board members suggested going ahead with CME
instead.
CME originally offered $4.55 in cash and stock in July, and both
parties have raised their bids multiple times.
Under the CME deal, CME would keep GFI's energy-trading
platform, Trayport, and its pricing-and-data business, known as
Fenics, and sell the firm's brokerage-and-clearing operation back
to GFI executives.
GFI shares rose about 6% to $5.91 in midday trading.
Write to Angela Chen at angela.chen@dowjones.com
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