BGC Partners, Inc. (NASDAQ: BGCP) ("BGC Partners" or "BGC"), a leading global brokerage company servicing the financial and real estate markets, and GFI Group Inc. (NYSE: GFIG) ("GFI Group" or "GFI"), a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced the successful completion of BGC's tender offer for GFI shares.
As of the expiration of the tender offer at 5:00 PM on February 26, 2015, approximately 54.6 million shares were tendered pursuant to the offer. The 54.6 million tendered shares, together with the 17.1 million shares of GFI common stock already owned by BGC, represent approximately 56.3% of GFI's outstanding shares. BGC has accepted the shares and expects to issue payment for the shares tendered on March 3, 2015. In addition, GFI employees holding RSUs will receive $6.10 per RSU in cash, based on their pre-existing vesting schedules. All outstanding conditions of the tender offer have been met.
GFI will be a controlled company and operate as a division of BGC, reporting to Shaun Lynn, President of BGC, and its financial results will be consolidated as part of BGC. Going forward, BGC and GFI are expected to remain separately branded divisions. GFI's current Executive Chairman, Michael Gooch, and its current Chief Executive Officer, Colin Heffron, will remain as Executives and Directors of GFI Group and shall continue as Chairman and CEO, respectively, of the GFI Division. Mr. Gooch shall also hold the title of Vice Chairman of BGC Partners, L.P.
Howard Lutnick, Chairman and Chief Executive Officer of BGC, said: "We are extremely pleased with the overwhelming support our tender offer received from GFI stockholders. We believe the combination of BGC and GFI will create a strong and diversified company, well positioned to capture future growth opportunities. This is a significant milestone and exciting time to be a partner, stockholder and employee of BGC. Through this combination, we expect to deliver substantial benefits to customers of the combined company, and we expect to become the largest and most profitable wholesale brokerage company."
Shaun Lynn, President of BGC, said: "This is a highly complementary combination, which will result in meaningful economies of scale. While the front office operations will remain separately branded companies, we plan on integrating the back office, technology, and infrastructure of these two companies in a smart and deliberate way. By the end of the first year, we expect to save at least $50 million annually on items including network infrastructure, telephone lines, data centers, vendors, disaster recovery, regulatory capital, and interest expense. We expect further cost savings in the second year and beyond. We also expect to generate increased productivity per broker and to continue converting voice and hybrid broking to more profitable fully electronic trading, all of which should lead to increased revenues, profitability and cash flows."
Mickey Gooch, Executive Chairman of GFI, added: "We believe GFI will benefit from being part of a larger and more diversified company and we look forward to working with the management team and brokers of BGC to build upon our success and create an extraordinary partnership. Importantly, this transaction will enable us to better serve the needs of customers of both BGC and GFI."
Colin Heffron, Chief Executive Officer of GFI, said: "We remain dedicated to being a premier provider of market-leading intermediary services and trading technologies and we are excited to offer customers of the combined company with the enhanced services this transaction provides."
The companies also announced that as part of the agreement with GFI, Marisa Cassoni, Frank Fanzilli Jr. and Richard Magee have resigned from the GFI Board. BGC has designated six directors to the expanded eight-member GFI Board. Three of these new board members are independent directors nominated by BGC. These new board members are:
- Howard Lutnick, Chairman and Chief Executive Officer of BGC;
- Shaun Lynn, President of BGC;
- Stephen Merkel, Executive Vice President, General Counsel and Secretary of BGC;
- William J. Moran, Former Executive Vice President, JPMorgan Chase & Co.;
- Peter J. Powers, President and Chief Executive Officer, Powers Global Strategies LLC; and
- Michael Snow, Managing Member and Chief Investment Officer of Snow Fund One, LLC.
More information on each of the directors will be included in SEC filings expected to be made by both BGC and GFI.
GFI stockholders with questions about tendered shares may call Innisfree M&A Incorporated, BGC's Information Agent, toll-free at (888) 750-5884.
Cantor Fitzgerald & Co. was BGC's financial advisor and dealer manager for the tender offer, while Wachtell, Lipton, Rosen & Katz was BGC's legal advisor.
GFI Group's financial advisor was Jefferies LLC, while Willkie Farr & Gallagher LLP acted as legal advisor to GFI Group. Greenhill & Co. acted as financial advisor to the Special Committee of GFI's Board of Directors and White & Case LLP acted as the Special Committee's legal advisor.