BGC Extends Tender Offer for GFI

Shareholders now have until 5PM Eastern Time on December 9, 2014 to respond to the offer, which has been amended since its original posting.

In the same announcement, the interdealer broker also said that the FCA would not be taking action over its move to increase its stake in GFI without regulatory antitrust approvals.

"BGC acknowledges the breach and is working with the FCA to ensure that changes are made to its systems and controls to ensure that such a breach does not occur again," says the firm, in a statement. "In light of this, and the particular circumstances of this breach, the FCA has taken the view that it is not appropriate in this specific case for it to take any formal action. However, the FCA has expressed its disappointment at the breach and has reiterated the seriousness with which it views such breaches and its willingness to take action in appropriate circumstances."

The tender offer had previously been set to expire on November 19. In further developments, the firm said that its discussions with the Special Committee of GFI Group's board, which had previously recommended a rejection of BGC's offer, might be willing: "under certain conditions, to recommend that GFI's stockholders accept BGC's tender offer, resign, and take actions necessary so that BGC will have control of two-thirds of GFI's board."

Tech Tussle
Separately, rival interdealer broker Icap's chief executive said that while consolidation in the space was welcome, the firm would be staying out of the months-long battle between the two firms, which started when GFI announced its acquisition by the Chicago Mercantile Exchange (CME) Group in late July. At the heart of the tussle is GFI's two technology businesses ─ Trayport and Fenics ─ which handle trading in foreign exchange and energy.

Under the terms of the CME deal, GFI would be bought, and then the brokerage arm sold back to a consortium including current members of the board, while CME Group would retain the two platforms. The deal valued GFI at $4.55 per share, whereas BGC's offer puts a $5.25 per share price on the firm, which it says constitutes a superior offer. GFI was trading between $5.02 and $5.09 on Nasdaq yesterday, with its yearly high so far reaching $6.18, with a low of $2.98.

"We are extending our offer to enable all shareholders to carefully consider our superior offer," says Howard Lutnick, chairman and CEO at BGC. "We remain committed to this transaction and urge all shareholders to tender their shares in order to receive the value to which they are entitled."

There was no public comment by GFI, although the firm has definitively stated that it remains fully committed to the previously agreed deal with CME Group. BGC had initially made its offer to the board of GFI, which initially agreed to open its books, but turned hostile in its bid after negotiations broke down.