BGC receives backing in battle for GFI

Ollie Gordon
US BROKERAGE giant BGC Partners received a boost yesterday in its battle against futures firm CME Group for control of New York-based broker GFI Group, as an independent proxy adviser backed BGC’s current bid over that of its rival.

Institutional Shareholder Services (ISS) recommended that GFI’s shareholders vote against the proposed merger with CME at a special meeting on 27 January.

In its analysis, ISS noted the following regarding the proposed CME transaction: “As the proposed transaction is economically inferior to the unsolicited all-cash competing offer, yet it is not at all clear that unaffiliated shareholders incur any greater downside risk in holding out for the economically superior offer from this ongoing bidding war, shareholders should vote against the proposed transaction on its current terms… and, if that offer does not improve to at least parity with the BGC bid, tender into the BGC offer instead.”

BGC and CME have been wrestling over GFI since September, when BGC chief executive Howard Lutnick said his firm would top its rival’s previously announced deal for the broker.