As many expected, BGC Partners Inc. (BGCP) has upped its hostile bid for interdealer broker GFI Group Inc. (GFIG) , besting an agreed-to offer between GFI and Chicago trading house CME Group Inc. (CME) .
BGC Partners said Wednesday after the market close that it had raised its all cash bid for GFI to $5.45 per share, or $694 million, from $5.25 per share. The deal provides a 3.8% premium to BGC's previous offer, which as rejected in November, and also tops an offer from CME for $5.25 in cash and stock.
"We — and we expect the market — already expected a higher offer from BGCP," wrote Niamh Alexander of Keefe Bruyette & Woods Inc. in a note Wednesday. "We also think that the deal could be very accretive for BGCP but it's still risky as a potentially hostile deal — so we don't see much higher offer coming here."
BGC, the former Cantor & Fitzgerald co. unit, said 12.4 million shares already had been tendered in favor of its offer, which, together with the 17.1 million shares the company owns, represent approximately 22.8% of GFI's total shares. In order to get the deal done, BGC said it would lower the threshold to complete the tender offer to 45% from a majority (51%).
Management, which owns 37.8% of the outstanding shares has already tendered into the CME transaction.
As a condition of the revised bid from BGC, the former Cantor Fitzgerald & Co. unit agreed to lower the threshold to complete the tender offer from a majority (51%) to 45%, in lieu of the fact 37.8% of the total issued and outstanding shares are owned by company management and have already been tendered to the CME transaction.