eSpeed Runs on Takeout Talk

eSpeed(ESPD Quote) is drawing shareholder ire by scotching a buyout bid from U.K. broker-dealer Tullett Prebon.

Cantor Fitzgerald, the closely held New York trading firm that spun off the electronic brokerage in an initial public offering eight years ago, rejected Tullett's $600 million proposal to acquire eSpeed's Class A shares.

Tullett officials were unavailable for comment, but shares of eSpeed soared 8% Wednesday to $10.47 as investors bet the pressure would force a sale of eSpeed.

Aaron Braun, portfolio manger of Greenbrae, Calif.-based investment management firm WC Capital Management, says Cantor chief Howard Lutnick acted rashly in turning down the offer. The firm, which owns 6.3% of eSpeed, says Lutnick -- who is also eSpeed's chairman -- should have hired an adviser.

"I'm not an activist, but this is a situation where I need to weigh in," Braun says. "Not to weigh in is not upholding my fiduciary duty."

He says his firm has submitted a letter to Cantor asking for a review of the takeout offer.

"The Tullett Prebon bid of $12 is on the low end of our valuation range of $12 to $16 per Class A share we highlighted in our letter to Mr. Lutnick. Braun is asking that the Cantor hire an investment adviser or propose a competitive offer," said Braun in a written statement to Cantor.