CME Ups Bid for GFI as Vote Looms

CME Group now offering $5.85 per share for interdealer broker.

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CME and GFI's management have been locked in a tug-of-war battle with BGC.

The Chicago Mercantile Exchange (CME) Group has once again increased its offer for interdealer broker GFI Group, in partnership with a consortium of GFI's current management, by offering a stock-and-cash deal equivalent to $5.85 per share.

The firm has delivered an executed agreement to GFI's special committee, which has been set up to review the various bids, with the revised offer.

The move is in direct response to bids by rival suitor BGC Partners, which submitted a $5.85-per-share all-cash tender offer late last week, contingent on GFI's board acknowledging its bid as a superior proposal. The non-contingent amount was also raised to $5.75.

CME Group itself will not be contributing additional consideration to the offer, but the money will instead come from a forfeiture of the raised amount, up from $5.25 (and later $5.60), by the management consortium, which is giving up approximately $40 million.

The last few days have seen a furious back-and-forth between BGC, CME and GFI, which have been battling for nearly six months over the future of the broker.

At the heart of CME's interest are GFI's two technology businesses, Trayport and Fenics, which handle trading in energy and foreign exchange.

The CME deal would see GFI merged with a subsidiary, with the brokerage arm then being sold to the management consortium as part of a two-step acquisition.

A shareholder vote is being held on January 27, in order to approve or reject the CME Group deal.

GFI was most recently trading at $5.785 per share on Nasdaq (1015 ET). The firm's share price when the deal with CME Group was first proposed, in late July 2014, was $3.11.

 

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