'Alphabet Battle' Continues as BGC Extends $5.45 Offer for GFI to Trump the CME

With GFI Group shareholders set to vote on whether to accept the CME Group’s $5.25 cash or stock takeover bid, BGC continued their hostile acquisition battle by extending the duration of their $5.45 all-cash offer today. Owning a minority stake in GFI Group, BGC responded to the CME Group’s acquisition goals with a higher all-cash offer of their own for GFI Group.

The takeover battle began last July when the CME Group issued a $4.55 offer for shares of GFI Group. At the time, the deal marked a sharp premium for GFI Group shares that had been trending lower during the first half of 2014 and were just above $3.00. That offer was followed by a $675 million, or $5.25 per share all-cash bid from BGC, which forced the CME to raise its offer in December to a similar amount to gain shareholder backing. That bid was then followed by BGC’s $5.45 bid in mid-December.

At stake is GFI Group, an interdealer that connects traders and Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term providers on its array of electronic platforms. Having a strong position in energy trading, GFI Group has become a more interesting purchase due to increased trading in the energy sector as oil prices have been crashing. For the CME Group, the acquisition of GFI Group would provide an instant opportunity for the firm to expand its European energy trading business. An operator of formal exchanges, the CME has also been expanding its electronic Trading Platform Trading Platform In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real In the FX space, a currency trading platform is a software provided by brokers to their respective client base, garnering access as traders in the broader market. Most commonly, this reflects an online interface or mobile app, complete with tools for order processing.Every broker needs one or more trading platforms to accommodate the needs of different clients. Being the backbone of the company’s offering, a trading platform provides clients with quotes, a selection of instruments to trade, real Read this Term venues, such as its swap execution facility (SEF) which was approved at the end of 2013.

A rival interdealer to GFI Group, but owning a 13.4% stake in the company, BGC has been sourced to have had previous negotiations with GFI Group about a merger previous to the CME Group’s bid. The interdealer industry, whose numbers also include Tradition, ICAP and Tullet Prebon, is viewed as being ripe for consolidation as rising regulatory requirements have created potential cost-saving synergies for firms that merge. However, due to competitiveness among interdealers for traders and liquidity providers to deal on their platforms, merger negotiations are difficult as they require participants to share sensitive operational data. As a result of the difficulties in consummating a merger, the CME Group’s friendly bid had put GFI Group into play, and provided an opportunity for BGC to direct an offer of their own directly to shareholders.