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- Private Consortium of GFI Group Management to Increase Cash Payment for GFI's IDB Business to $282M from $254M Plus the Assumption at Closing of Approximately $77M in Unvested Deferred Compensation Liability to Employees
- Increased Consideration Passed Entirely to Holders of GFI Stock Excluding GFI Group Management Consortium Who Will Receive Only $5.25 per Share
CME Group Inc. ("CME Group" or "CME"), the world's leading and most diverse derivatives marketplace, and GFI Group Inc. ("GFI Group" or "GFI"), a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets, today announced that they have revised their definitive agreements to increase the consideration payable to GFI Group stockholders to $5.60 per share from $5.25 per share, payable in a mix of shares of CME Group Class A common stock and cash. This new offer price represents more than an 80% premium above the closing price of $3.11 per share of GFI Group common stock on July 29, 2014, the last day of trading prior to the announcement of the CME transaction.
As part of the revised CME transaction, the purchase price to be paid by a private consortium of GFI Group management (the "GFI Group Management Consortium"), led by current Executive Chairman Michael Gooch, CEO Colin Heffron and Managing Director Nick Brown, for GFI Group's wholesale brokerage business was increased to approximately $282 million, up from $254 million in cash, along with the assumption, at closing, of approximately $77 million of unvested deferred compensation and other liabilities. CME Group is also contributing $9.5 million in additional stock consideration to GFI shareholders.
Together, these new contributions deliver an approximately $37 million increase in purchase price to all GFI Group stockholders, excluding the shares held by the GFI Group Management Consortium through Jersey Partners Inc., which will not share in the $0.35 per share increase announced today and will only receive $5.25 per share.
The updated terms of the CME transaction have been approved by the Board of Directors of GFI Group upon the unanimous recommendation of a Special Committee comprised solely of independent and disinterested directors, and by the Board of Directors of CME Group. GFI Group's Board of Directors, acting upon the unanimous recommendation of the Special Committee, continues to recommend that GFI Group's stockholders vote to approve the CME merger agreement. The transaction remains subject to the approval of GFI Group's stockholders; GFI Group will hold a special meeting of its stockholders on January 27, 2015 to vote on the CME transaction.
If GFI Group stockholder approval is obtained, the parties expect the transaction to close shortly thereafter.
Barclays Bank PLC is acting as financial advisor to CME Group and Skadden, Arps, Slate, Meagher & Flom LLP is acting as CME Group's legal advisor. Jefferies Group LLC is acting as financial advisor to GFI Group and Willkie Farr & Gallagher LLP is acting as legal advisor to the GFI Group Management Consortium. Greenhill & Co. is acting as financial advisor to the Special Committee and White & Case LLP is acting as the Special Committee's legal advisor.
