Does the CME Group still have their eyes on GFI Group’s electronic trading assets? According to a report from Bloomberg the answer is yes.
In a bidding war that ultimately was won by BGC Partners, the CME Group had made a takeover attempt for GFI Group. The CME’s interest was in GFI’s electronic trading platforms, Trayport and Fenics, with the firm planning to follow up the acquisition with GFI’s management buying back the brokerage business. Due to a higher tender offer from BGC Partners, the CME’s acquisition attempt failed to generate shareholder approval.
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According to Bloomberg, despite GFI’s executives backing a tender offer from BGC, and agreeing to work with them in the future, the CME continues to be interested in acquiring the Trayport and Fenics platforms that it had eyed in the past. Of the two products, Trayport has been viewed as having the most interest from the CME as it has strong market share in European oil and energy trades, an area of weakness for the CME. A currency options trading platform, Fenics, would add scale of products and market participants for the CME, but fills less of a need for the exchange operator due to its existing FX options business doing well.
The question then becomes, would BGC be willing to part with the electronic trading platforms? When it made its offer for GFI, BGC did focus on the brokerage side of the business, and adding GFI’s customers based to scale their offering. However, along with Cantor Fitzgerald which is part of their group, BGC Partners operates its own set of electronic trading platforms, in tandem with their brokerage business. As such, in assets where there is minimal overlap, BGC may have interests to keep GFI’s electronic platforms from being sold.
When contacted about confirmation of the Bloomberg report, representatives from BGC Partners and CME Group declined to comment on the story. However, a source from BGC Partners did state to Forex Magnates that the firm is in fact exploring opportunities related to both the Trayport and Fenics platforms.