By Liz Hoffman
BGC Partners Inc. has agreed to pay about $778 million for rival
brokerage firm GFI Group Inc., ending a monthslong hostile takeover
effort.
BGC will pay $6.10 a share for GFI and will gain control of
GFI's board, which had been a sticking point between the two sides,
people familiar with the matter said. The agreement would give BGC
six out of eight board seats, satisfying a condition GFI's board
had earlier rejected, they added.
The deal comes after GFI shareholders last month rejected a
lower-priced sale to CME Group Inc.
BGC and GFI are interdealer brokers that arrange trades on
behalf of Wall Street banks. The industry has been consolidating
amid increased regulation of complex financial instruments such as
derivatives.
"We are very happy to have reached an amicable conclusion to
this long process," said BGC President Shaun Lynn in a news
release. "We look forward to working with the management team and
brokers of GFI as we build what we hope will be the largest and
most profitable global wholesale brokerage company."
GFI is expected to operate as a unit of BGC, though the two will
remain separately branded divisions.
BGC received about 48% of GFI shares in a tender offer,
including its own 13.5% stake, the people said. In a tender offer,
a buyer purchases stock directly from a target company's
shareholders.
The tender offer had been set to expire Thursday but will be
extended through Feb. 26, giving BGC more time to get additional
shareholder support.
Chelsey Dulaney contributed to this article.
Write to Liz Hoffman at liz.hoffman@wsj.com
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