INTL FCStone Closes $350 Million Private Notes Offering

The proceeds will be used to fund the acquisition of GAIN Capital.

INTL FCStone Inc. announced on the 11th of June that it has closed its $350 million in aggregate principal amount of Senior Secured Notes due 2025 offering, which was announced last month.

The Notes were sold at the offering price of 98.5 per cent of the aggregate principal amount thereof, the financial services provider said in the statement on Thursday. The gross proceeds have been deposited into a segregated escrow account.

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“Following satisfaction of the escrow release conditions, the Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior second lien secured basis, by certain subsidiaries of the Company that guarantee the Company’s senior credit facility and by GAIN Capital Holdings, Inc. (“GAIN”) and certain of its domestic subsidiaries,” the statement said.

As Finance Magnates reported, INTL FCStone plans on using the proceeds from the sale of the notes, together with cash on hand, to fund the cash consideration for the merger of GAIN Capital.

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The deal will see INTL FCStone buy GAIN for $6 per share in an all-cash transaction. This represents approximately $236 million in equity value. Following the acquisition, GAIN will survive as the company’s wholly-owned subsidiary.

GAIN shareholders vote for INTL FCStone merger

Earlier this month, on the 5th of June, GAIN Capital shareholders voted in favour of the merger. In fact, more than 71 per cent of votes cast by the FX broker’s shareholders were in favour of the transaction.

This represented 86 per cent of the total in attendance, well above the required two-thirds threshold. Nearly 83.2 per cent of all GAIN’s shareholders attended the special meeting to decide on the merger proposal.

Although shareholders voted in favour of the merger, some directors opposed the transaction. In May, the US market maker said that two members of its Board of Directors, Peter Quick and Chris Sugden, no longer supported the merger with INTL FCStone Inc.

This is because Quick and Sugden believe that in light of the performance of GAIN, boosted by COVID-19, since the signing of the Merger Agreement, which puts the company’s value at $6 per share, is no longer reflective of the long term value of GAIN Capital.

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