BGC Partners said Wednesday that it was beginning a hostile bid for the GFI Group, a New York brokerage and clearing firm, after it failed to strike a deal to acquire its rival following a counteroffer last month.
The CME Group agreed in July to acquire GFI in a two-part transaction in which it would gain the brokerage company in an all-stock deal worth about $580 million and then sell its wholesale brokerage and clearing businesses to a group led by GFI’s management.
BGC Partners, which owns about 13.5 percent of GFI and is based in New York, made a counteroffer last month, but said it was not able to reach an agreement with GFI’s board of directors.
On Wednesday, BGC Partners said it was willing to pay about $675 million in cash for the firm, the same amount as its prior counteroffer, and would present a tender offer directly to shareholders.
“Despite our best efforts to engage with GFI regarding a negotiated transaction, we have been met with only unreasonable demands and delay tactics in connection with our attempts to execute even a confidentiality agreement,” Howard W. Lutnick, the BGC Partners chairman and chief executive, said in a news release.
“It is time to allow GFI shareholders to choose for themselves,” he added.
In its tender offer, BGC Partners said it would pay shareholders $5.25 a share in cash, a 15 percent premium over CME’s offer of $4.55 a share.
“Our all-cash offer will provide GFI shareholders with immediate, certain and compelling value, without material contingencies or significant execution risk,” Shaun D. Lynn, the BGC Partners president, said in a letter to GFI’s board made public on Wednesday.
In July, CME — which operates the Chicago Mercantile Exchange, the Chicago Board of Trade and the New York Mercantile Exchange — and GFI announced that they had reached a merger agreement in which CME would pay the equivalent of $580 million in shares and assume about $240 million in debt. CME said it expected to pay down the debt in 2015.
As part of the transaction, CME said it would sell GFI’s wholesale brokerage and clearing businesses to a consortium of GFI’s management for $165 million in cash and the assumption of about $63 million of unvested compensation and other liabilities.
On Wednesday, BGC Partners said that it believed the CME transaction would “deprive GFI shareholders of the value of their investment” because it would sell the brokerage business to GFI’s management “at a discount.”
GFI and CME said at the time that Jersey Partners, GFI’s largest shareholder, and members of the management consortium had agreed to vote in favor of the transaction. The deal, if consummated, is expected to close next year.
The deal was driven by CME’s desire to acquire GFI’s European energy trading business and foreign exchange option trading platform.
Cantor Fitzgerald, the investment bank headed by Mr. Lutnick, and the law firm Wachtell, Lipton, Rosen & Katz advised BGC Partners on its counteroffer and hostile bid.