CME Group Inc (CME)’s Purchase of GFI Group Inc. (GFIG) Interrupted by Hostile Takeover Bid

When CME Group Inc (NASDAQ:CME) worked out a takeover bid worth $4.45 a share for GFI Group Inc. (NYSE:GFIG) back in late July, which represented a 46% premium on their stock price at the time, it was expected the deal would go through with little resistance. As The Deal’s Senior Writer Bob O’Brien reported on The Street today however, BGC Partners, Inc. (NASDAQ:BGCP) has thrown a wrench in those plans with a seemingly superior bid.


“The bid by BGC caught Wall Street by surprise, as it was thought the GFI/CME lock up was something of a slam dunk. In its bid, BGC would pay $5.25 a share for the outstanding stock of GFI, which on the face of it, trumps the $4.55 a share plus the assumption of debt that CME had negotiated with GFI in July. BGC’s bid offers a premium on the CME proposal and pays it in cash as compared with CME’s all stock pitch,” O’Brien said.

The current tender offer is a hostile takeover attempt by BGC Partners, Inc. (NASDAQ:BGCP), after their initial offer for GFI Group Inc. (NYSE:GFIG) was rebuffed days before the CME Group Inc (NASDAQ:CME) worked out their own deal for the company. BGC Partners, Inc. (NASDAQ:BGCP), which is already a 13.5% shareholder in GFI Group Inc. (NYSE:GFIG) does not believe the CME Group Inc (NASDAQ:CME)  deal represents fair value for shareholders, and are now attempting to appeal directly to them.

The three companies are involved in the interdealer broking industry. CME Group Inc (NASDAQ:CME), which owns the Chicago Mercantile Exchange wants to acquire GFI Group Inc. (NYSE:GFIG) for their energy and foreign exchange software, which will help them expand into European energy trading.

Shares of GFI Group Inc. (NYSE:GFIG) have now spiked twice over the past six weeks, on the news of both takeover bids. They first soared 43.7% on July 30 after the CME Group Inc (NASDAQ:CME) offer was disclosed, and then another 25% in the two trading days following the newest takeover bid. All told, the stock has jumped 80% over the past six weeks.

Disclosure: none