CME and Management Consortium Raise Bid for GFI Group

Willkie continues to represent GFI Group and a GFI management consortium in the sale of GFI Group to CME Group, a deal valued in excess of $900 million including the related $254 million acquisition of GFI’s interdealer broker business by a group formed by management of GFI. 

On December 2, Willkie client GFI Group, Inc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, and CME Group Inc., the world's leading and most diverse derivatives marketplace, announced that they have revised their definitive agreements to increase the consideration payable to GFI Group stockholders from $4.55 per share in CME Group stock to $5.25 per share, payable in a mix of shares of CME Group Class A common stock and cash.

As part of the revised transaction, the purchase price to be paid by a private consortium of GFI Group management for GFI Group's wholesale brokerage business increased to $254 million, up from $165 million in cash offered in July, along with the assumption, at closing, of approximately $72 million of unvested deferred compensation and other liabilities. See Willkie’s July 30, 2014 announcement here.

In September, BGC Partners announced an intention to launch a hostile tender offer for GFI shares. After failing to reach an agreement with GFI’s special committee of the board of directors on confidentiality arrangements  after several weeks, BGC launched a hostile bid for GFI Group shares.  In November, the GFI board rejected the unsolicited tender offer from BGC and announced its continued support for the pending transaction with CME Group and the GFI management consortium, which has now been revised.

This $89 million increase is being passed along in its entirety by CME Group to GFI Group stockholders.  CME Group will retain Trayport, a leading provider of trading software in the European energy markets, and FENICS, a firm that provides best-in-class price discovery, analytics, risk management and workflow connectivity services for the global OTC FX options markets.

CME Group's total consideration of approximately $655 million for Trayport and FENICS, including assumption of approximately $240 million of GFI Group debt, remains unchanged under the revised transaction terms.

Willkie is acting as legal advisor to GFI Group and the GFI Group management consortium.  Based in New York, GFI Group employs over 2,000 people globally.  More than 2,500 institutional clients benefit from the company’s know-how and experience in operating electronic and hybrid markets for cash and derivative products across multiple asset classes, including fixed income, interest rates, foreign exchange, equities, energy and commodities.

CME Group exchanges offer the widest range of global benchmark products across all major asset classes, including futures and options based on interest rates, equity indexes, foreign exchange, energy, agricultural commodities, metals, weather and real estate.

The cross-border, multidisciplinary Willkie deal team is led by partner Jeffrey Poss and includes partners Georgia Bullitt, Eugene Chang, Todd Cosenza, William Hiller, Michael Katz, Graham Lane, Tariq Mundiya, Christopher Peters, William Rooney, Michael Schwartz, David Tayar and Adam Turteltaub; of counsel Martin Miller; special counsel Jonathan Konoff and Ajanaclair Lynch and associates Amir Ghavi, Jacob Kleinman, Iris Lichtman, James Markel, Geri Anne McEvoy, Samantha Palmer, DJ Stauber, Agathe Richard, Frank Scaduto and Timothy McGinn.