Boston, MA 09/09/2014 (wallstreetpr) – BGC Partners, Inc. (NASDAQ:BGCP) has plans to make an unsolicited bid of $675 million in cash to acquire GFI Group Inc. (NYSE:GFIG). GFI group is the rival company of BGC Partners. The acquisitions seem only the way to enhance the revenue at a time when the broking industry is witnessing soft trading revenues amidst placid markets. Also, it has to deal with the new rules that restrict the interdealer brokers from risk-taking hitting the revenues considerably. BGC and GFI are rivals promoting bank trading derivatives, securities and bonds.
The bid rivalry
The bid of BGC Partners of $5.25 per share tops the bid of CME Group Inc (NASDAQ:CME) who offered to acquire GFI Group for $4.55 per share. Moreover, CME bid of $580 million is all in stock offer. BGC bid comes at a premium of 15% as compared to CME offer and also offers 4% premium on GFI’s current stock price. BGC itself is a spun off company that separated from Cantor Fitzgerald, L.P., a decade ago. The proposal of BGC will be sent to GFI’s board and in the event of rejection, BGC can approach the shareholders directly. The acquisition plan is proposed by Howard Lutnick, who is Chairman and the CEO of BGC and Cantor both.
The future ahead
BGC also sold one of its electronic trading platforms of treasuries to NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) in a deal valued at $1.2 billion. In the case BGC offer is accepted by GFI, it will be the largest acquisition of BGC till date. BGC has already got approximately 14% stake in GFI. The adviser to BGC in the proposed deal will be Cantor Fitzgerald. Apart from the acquisition, the interdealer brokers are focusing on cost-cutting and other measures to enhance the revenues. BGC reported revenue of $430.3 million, down 8.7% in the second quarter of the year. GFI revenues also declined 10% to $218.1 million in the second quarter.
