Closely held bond dealer Cantor Fitzgerald set plans to combine its BGC Partners and eSpeed (ESPD Quote) units in an all-stock deal worth $1.22 billion.
The deal comes as activist shareholders have been pressuring Cantor to sell eSpeed, which last month rejected a $600 million buyout offer from U.K. broker-dealer Tullett Prebon. Terms of the eSpeed-BGC transaction may not please investors such as WC Capital and Chapman Capital, which have publicly criticized Cantor chief Howard Lutnick for ignoring the Tullett Prebon bid.
eSpeed, which had just 50 million shares outstanding heading into the transaction, will issue BGC 133 million shares in the merger. Lutnick will be CEO of the combined company, which will be called BGC but will continue to use the eSpeed name on one of its electronic brokerage brands.
Shares of eSpeed closed Tuesday at $9.19....
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