BGC Partners, Inc. (NASDAQ: BGCP) and GFI Group Inc. have announced the culmination of a tendered offer support agreement in which GFI’s board of directors unanimously agreed to support BGC’s tender offer for all outstanding shares of GFI common stock at $6.10 per share in cash.
In early February, the expiration of BGC Partners’ $6.10 tender offer for shares of GFI Group was extended to February 19. This paved the way for BGC’s $6.10 tender offer to gain favor from shareholders, which ultimately proved to be the deciding bid.
In addition, the agreement stipulates that BGC will be designating six out of eight directors of the expanded GFI Board – BGC has issued a further extension for stockholders to February 26, 2015, to allow for the tender of this decision.
BGC exceeded its 45% requirement with approximately 48% of shares tendered, though given the desire to facilitate this closing, the group had reduced the minimum tender condition to 43%.
GFI is expected to operate as a division of BGC, which will report to Shaun Lynn, President of BGC. Its financial results are expected to be released as a consolidated part of BGC moving forward.
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In terms of management, BGC and GFI are expected to remain separately branded entities – GFI’s current Executive Chairman, Michael Gooch, and its current Chief Executive Officer, Colin Heffron, are both expected to remain installed as executives of GFI as well as members of its board of directors.
According to Howard Lutnick, Chairman and Chief Executive Officer of BGC, in a recent statement on the agreement, “We are thrilled to welcome the world class people from GFI into the BGC family. We have an extraordinary opportunity ahead to grow with BGC’s strong financial position coupled with both companies’ extraordinarily talented brokers and market leading technology. We look forward to delivering strong earnings and cash flow growth to our shareholders going forward.”
“We are very happy to have reached an amicable conclusion to this long process. 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. Our transaction will provide substantial benefits to GFI’s customers, counterparties, brokers, and other employees, all of whom will benefit from GFI being part of a larger, faster growing, and more diversified investment grade company. We believe that BGC’s employees, customers, shareholders, and bondholders will similarly benefit from the combination of these two great organizations,” added Shaun Lynn, President of BGC, in an accompanying statement.
Speaking on the GFI side, Mickey Gooch, Executive Chairman of GFI, added, “We are excited to bring these two great companies together. I look forward to building upon our success to create an extraordinary partnership.”
“I believe GFI’s leading technology and advanced global market position will enhance the services provided to customers of our combined business. More importantly, we look forward to working together as a separately branded division to continue providing market-leading intermediary services and trading technologies,” noted Colin Heffron, Chief Executive Officer of GFI.
Finally, according to the terms of the agreement, GFI Stockholders who miss the February 26 deadline could potentially have to wait until restriction lapses on January 30, 2016, for their opportunity to receive $6.10 per share.