The GFI Story to Date

Chronicling a lesson in corporate disruption.

Photograph of the New York City skyline including the Chrysler Building
New York City skyline including the Chrysler Building

It started with a shrug. Back in the summer of 2014, the Chicago Mercantile Exchange (CME) Group said that it would be purchasing GFI Group for a stock-and-cash transaction valuing the firm at $4.55 per share. BGC Partners had other ideas.

The larger broker stepped in with its own bid of $5.25 per share in an all-cash tender, which it said constituted a superior offer. GFI formed a special committee to evaluate the development, and from there, a series of events progressed that have ended up in a bidding war between BGC, CME Group and GFI's management consortium for the future of the firm.

Below is a timeline of relevant articles to track the story from its start through to the past few days of furious contingent and non-contingent price hikes.


cmeCME to Acquire Trayport and Fenics from GFI Group
July 30, 2014

This all began with CME buying trading platforms from a broker ─ Fenics and Trayport, which handle foreign exchange (FX) and energy ─ and then selling off the brokerage arm to a management consortium. A notable, but otherwise unremarkable summer story.

manhattan-14BGC Presents Offer for GFI Group
September 9, 2014

BGC, however, also had designs on GFI Group. Flush with cash after a good run, the broker ─ headed up by Cantor Fitzgerald chief Howard Lutnick ─ presented its own offer for the rival firm, an all-cash tender that valued the business far in excess of what CME was offering.

colin-heffron-gfi-groupGFI Board Acknowledges BGC Proposal
September 16, 2014

Indeed, the $6.25 all-cash price tag forced GFI to agree to open its books to BGC, despite language describing the bid as unsolicited, and reaffirming its commitment to the CME Group deal. A special committee was formed to assess the offer, and its likelihood of success.

New YorkBGC Bid for Rival Broker Turns Hostile
October 22, 2014

Relations between the two broke down, and BGC followed through on its threat to take the offer directly to shareholders of GFI Group - including BGC, incidentally, which owned around 13 percent of the firm. As a result, the hostile offer is presented to owners of GFI stock, kicking off a series of events.

Photograph of the New York City skyline including the Empire State BuildingBGC Reaffirms Intent as GFI, CME Stay Silent
30 October 2014

In third-quarter earnings calls, BGC's management mentioned the GFI transaction but declined to go into details, aside from saying that it was very serious about the deal. GFI and CME Group also declined to go into any specifics regarding the ongoing tussle over the bids in play.

manhattan-at-duskGFI Board Rejects BGC Offer
November 6, 2014

The special committee of independent board members from GFI rejected BGC's offer, citing concerns over whether the transaction couldcomplete. BGC, for its part, said that its offer to shareholders still stood, but the deadline of November 19 for shares to be tendered was also still set.

A sign on Wall StreetBGC Extends Tender Offer for GFI
November 25, 2014

BGC exercised its right to extend the deadline for shareholders to tender their shares to the BGC bid, through to December 9. The firm also said that the UK Financial Conduct Authority would not be pursuing action against it for ramping up its holdings in GFI prior to its bid.

Financial figuresCME Matches BGC in Battle for GFI
December 3, 2014

After being silent for months on the developments, the CME Group announced that its joint bid for GFI with the management consortium would be increased to match BGC's price of $5.25 per share. The other terms and conditions would remain the same.

New YorkBGC Further Extends GFI Offer Deadline
December 10, 2014

BGC once again decided to extend its deadline for shareholders to sign on to its offer, moving the goalposts to January 6, 2015. At this point, BGC's proposal had attracted 12.4 million shares committed to the bid, which was far below the level needed for the offer to complete.

money-bag-collateral-waters-july2014BGC Increases Offer for GFI Group
December 18, 2014

Following on from CME Group's match for its original bid, BGC upped the ante by increasing its all-cash tender offer to $5.45 per share. It once again reaffirmed that, in its view, its offer was superior, and questioned the motivations behind the deal with CME Group, which it said benefited senior GFI figures.

new-york-at-nightBGC Proposes Contingent Increase in GFI Offer
January 15, 2015

BGC went another step further after GFI announced that an extraordinary shareholder meeting would be held to vote on the CME proposal, in an attempt to put the issue to bed. It upped its bid to $5.60 per share, on the condition that GFI's special committee recognised its offer as superior.

bulls-and-bearsBidding War for GFI Surges
January 16, 2015

Layers of complexity were added on both sides when CME matched BGC's bid once more, representing a $1.05-per-share increase on its original bid. The management consortium would not benefit from this price rise. In response, BGC upped its contingent bid to $5.85 per share, with an immediate non-contingent rise to $5.75.

The shareholder meeting will be held on January 27, 2015. The story continues.

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