Acquisition of GFI Group Inc. by CME Group Inc. May Not Be in Shareholders’ Best Interests
Robbins LLP is investigating the proposed acquisition of GFI Group Inc. (NYSE: GFIG) by CME Group Inc. (NASDAQ: CME). On July 30, 2014, the two companies announced the signing of a definitive merger agreement pursuant to which CME Group will acquire GFI Group. Under the terms of the agreement, GFI Group shareholders will receive $4.55 per share in CME Group Class A Common Stock for each share of GFI Group stock owned. Following the closing of the transaction, CME Group will sell GFI Group’s wholesale brokerage and clearing businesses to a private consortium of GFI Group management.
Is the Proposed Acquisition Best for GFI Group and Its Shareholders?
Robbins LLP’s investigation focuses on whether the board of directors at GFI Group is undertaking a fair process to obtain maximum value and adequately compensate GFI Group shareholders. As an initial matter, the $4.55 merger consideration is below the target price of $5.00 set by an analyst at Sandler O’Neill & Partners, LP on July 26, 2013. On April 29, 2014, GFI Group released its first quarter 2014 financial results, reporting strong revenue increases. Specifically, non-GAAP net revenues increased 1.1% to $202.1 million compared to $199.8 million in the first quarter 2013. In commenting on the company’s first quarter results, Colin Heffron, GFI Group’s Chief Executive Officer noted, “We are pleased with our first quarter results that show we are successfully transforming and strengthening GFI’s core execution business by providing end-to-end trading solutions”. In light of these facts, Robbins LLP is examining GFI Group’s board of directors’ decision to merge the company now rather than allow shareholders to continue to participate in the company’s continued success and future growth prospects.
GFI Group shareholders have the option to file a class action lawsuit to ensure the board of directors obtains the best possible price for shareholders and the disclosure of material information.
GFI Group shareholders interested in information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.