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Share Name | Share Symbol | Market | Type |
---|---|---|---|
CME Group Inc | NASDAQ:CME | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.87 | -0.88% | 211.27 | 210.67 | 211.82 | 213.57 | 211.17 | 213.14 | 1,241,040 | 22:23:33 |
By Liz Hoffman
GFI Group Inc. and CME Group Inc. on Friday agreed to terminate their merger agreement after GFI shareholders rejected the buyout proposal.
The move opens the door for rival BGC Partners Inc. to press its own hostile bid for GFI, according to people familiar with the matter. GFI said in a news release that it was exploring its options.
CME's bid of $5.85 a share failed to get enough votes at a shareholder meeting Friday in New York. CME had planned to keep GFI's software businesses and sell back the brokerage, a middleman to Wall Street banks, to a group of GFI executives, including Chairman Mickey Gooch.
BGC, run by Cantor Fitzgerald Chief Executive Howard Lutnick, has made a competing, $6.10-a-share tender offer for all of GFI, in which it owns a 13.5% stake. That offer values the firm at about $778 million and expires Tuesday.
Mr. Lutnick urged shareholders "to tender their shares into our clearly superior offer, and we are prepared to move quickly to complete this transaction."
Interdealer brokers like GFI and BGC connect banks looking to trade financial instruments such as derivatives. The business has been under pressure in recent years as banks have curbed trading and regulators have sought more oversight over the derivatives market.
On Friday, GFI Group's shares fell seven cents, or 1.2%, to $5.61. BGC Partners fell 36 cents, or 4.3%, to $7.83, and CME's stock fell 92 cents, or 1.1%, to $85.30.
Bloomberg earlier Friday reported on the vote.
BGC and CME had been locked in a bidding war over GFI since last summer, a fight that had exacerbated a rivalry between the two firms. Shareholder advisory firms Institutional Shareholder Services Inc. and Glass, Lewis & Co. recommended against the bid from GFI management and CME, citing BGC's higher bid and potential conflicts of interest among GFI's management.
While BGC's bid is higher, it faces its own obstacles. BGC has conditioned its bid on getting two-thirds of GFI's director seats, which GFI's existing board has resisted. BGC can waive that requirement, but then risks finding itself with a hefty stake but little influence.
Mr. Gooch and other GFI insiders own about 38% of its stock.
The failed vote could also draw out other suitors. The official tally wasn't available. The deal faced long odds given BGC's 13.5% stake and a GFI requirement that any merger be approved by a two-thirds majority.
Write to Liz Hoffman at liz.hoffman@wsj.com
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