NEW YORK, Jan. 27, 2015 /PRNewswire/ -- Michael Gooch,
in his capacity as controlling stockholder of Jersey Partners Inc.
("JPI"), a 36%+ stockholder of GFI Group Inc. ("GFI") (NYSE: GFIG),
today issued an open letter to GFI shareholders in support of the
higher, amended offer from CME Group (Nasdaq: CME) to acquire all
outstanding shares of GFI for $5.85
per share. Mr. Gooch is also Executive Chairman of GFI.
The full text of the letter follows:
Michael Gooch
c/o
Jersey Partners Inc.
569 Middle Road
Bayport, NY 11705
January 27, 2015
To My Fellow GFI Stockholders:
I write in my capacity as the controlling stockholder of Jersey
Partners Inc. ("JPI"), a 36%+ stockholder of GFI Group Inc.
("GFI").
CME Group Inc. ("CME") is offering GFI stockholders $5.85 per share in a consensual, tax‑efficient
merger transaction that is ready to close (the "CME Merger").
BGC Partners, Inc. ("BGC"), on the other hand, has made a highly
conditional hostile tender offer to acquire all the outstanding
shares of GFI's common stock for $6.10. You can opt for a "bird in the hand"
with CME, or hold out for "BGC in the bush."
As part of the CME Merger, Colin
Heffron, Nick Brown and I are
buying GFI's interdealer brokerage business (the "IDB Business")
for approximately $287 million.
We are also taking on approximately $82
million in deferred compensation owed to GFI employees,
bringing the total consideration we are paying to approximately
$369 million. Furthermore, the
management consortium has made additional financial and commercial
commitments to CME that are designed to maximize value for GFI
shareholders.
The $5.85 price that will be paid
for your shares as part of the CME Merger—which has received all
the necessary regulatory approvals to close and is on the table for
your vote this coming Friday—implies a market cap of $743 million for GFI. That is an 88%
premium compared to GFI's share price on July 29, 2014, the day before the initial
announcement of the CME Merger.
Colin, Nick and I will be paid only $4.44 for each of our GFI shares being sold
through JPI. By taking this reduced sale price—and passing up
a substantial portion of the premium that you and the other GFI
stockholders will receive in the CME Merger—we have improved the
value for all of GFI's stockholders.
My ex-wife, Diane Gooch, is a
significant stockholder of GFI (through JPI) and is also willing to
take a reduced sales price for her more than 15 million
shares. She is not part of the group purchasing the IDB
Business, and her financial interests are completely aligned with
yours, but she has agreed to accept just $5.46 for each of her GFI shares that will be
sold through JPI. That is her vote of confidence in the CME
Merger and shows how much she wants to see the CME Merger
close.
While we are willing to take these significantly reduced sales
prices in order for GFI stockholders to maximize the value of their
shares, BGC's commitment to a deal remains unclear. After
five-and-a-half months of negotiations with GFI's Special
Committee, BGC still has not signed a non-disclosure
agreement with the standard no-solicitation, no-poach, and
no-hiring conditions necessary to protect GFI from a raid on its
employees. As a result, I believe BGC's hair trigger
conditionality is unlikely to be satisfied given its inability to
do due diligence without such a customary NDA in place.
BGC's tender offer remains highly conditional. Most
notably, BGC's offer is conditioned on the current GFI board
voluntarily handing over board control to BGC if BGC receives
tenders for as little as 45% of GFI's outstanding shares.
That 45% represents less than 41% of the outstanding shares of GFI
on a fully diluted basis. By comparison, JPI and other insiders and
employees own or are entitled to more than 44% of the fully diluted
share count once restricted stock units are factored in. In my
opinion, it is not appropriate for BGC to get control of two‑thirds
of GFI's board seats in these circumstances.
BGC's tender offer is also subject to (among other things) an
impairment condition that cannot be satisfied without due
diligence. Given BGC's refusal to sign an NDA, it cannot
begin due diligence and its impairment condition therefore cannot
be satisfied. In my opinion, this effectively represents a
due diligence out from its obligation to close its tender
offer.
To be clear, even if 45% of GFI's shares (or more) are tendered
to BGC next week, the tender offer is still subject to many other
conditions, such as the impairment condition, which will remain
unsatisfied. So even if BGC reaches the 45% tender
threshold, there is no assurance or guarantee that you will receive
$6.10 for your shares.
Fortunately, GFI stockholders have an extremely compelling
alternative to the highly conditional BGC offer: the pending
transaction with CME which will benefit ALL GFI
stockholders. By choosing the tax-efficient CME
transaction that offers you the right to elect cash and/or CME
shares totaling $5.85 per share
rather than BGC's hostile, fully taxable conditional tender offer,
you will avoid being stuck in limbo for a significant period of
time—and possibly indefinitely—while waiting for the material
conditions of BGC's tender offer to be satisfied.
I urge you to vote in favor of the CME Merger so that all GFI
stockholders can receive the tax-efficient $5.85 per share in merger
consideration. I also urge you not to tender your shares
to BGC or vote against the CME Merger. Doing so is a vote for
uncertainty and against your own financial interests.
I thank you for your continued support.
Sincerely,
Michael Gooch
Important Information for Investors and Stockholders
In connection with the proposed transaction between GFI and CME,
on December 24, 2014 the Securities
and Exchange Commission (SEC) declared effective CME's registration
statement on Form S-4 that included a definitive proxy statement of
GFI that also constituted a definitive prospectus of CME. On
December 24, 2014, GFI commenced
mailing the definitive proxy statement/prospectus to stockholders
of GFI. On January 23, 2015,
CME filed a supplement to the definitive proxy statement/prospectus
on Form 424(b)(3) with the SEC, which has been mailed to
stockholders of GFI. INVESTORS AND SECURITY HOLDERS OF GFI
ARE URGED TO READ THE DEFINITIVE PROXY STATEMENT/PROSPECTUS
(INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER
DOCUMENTS FILED WITH THE SEC, CAREFULLY AND IN THEIR ENTIRETY
BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION.
Investors and security holders may obtain free copies of the
registration statement and the definitive proxy
statement/prospectus and other documents filed with the SEC by CME
and GFI through the website maintained by the SEC at
http://www.sec.gov or at the SEC public reference room at 100 F
Street N.E., Room 1580, Washington,
D.C. 20549. Please call the SEC at (800) 732-0330 or
visit the SEC's website for further information on its public
reference room. Copies of the documents filed with the SEC by
GFI are available free of charge on GFI's website at
http://www.gfigroup.com or by contacting GFI's Investor Relations
Department at (212) 968-6905. Copies of the documents filed
with the SEC by CME are available free of charge on CME's website
at http://www.cmegroup.com or by contacting CME's Investor
Relations Department at (312) 930-8491.
Participants in the Solicitation for the Proposed Merger
Between GFI and CME
GFI and its directors, executive officers and certain of its
employees may be considered participants in the solicitation of
proxies in connection with the proposed transactions involving GFI
and CME. Investors and security holders may obtain more
detailed information regarding the names, affiliates and interests
of GFI's directors and executive officers by reading GFI's Annual
Report on Form 10-K for the year ended December 31, 2013, which was filed with the SEC
on March 13, 2014, its proxy
statement for its 2014 annual meeting of stockholders, which was
filed with the SEC on April 22, 2014,
and its Current Report on Form 8-K filed with the SEC on
July 25, 2014. These documents
can be obtained free of charge from the sources indicated
above. Additional information regarding the participants in
the proxy solicitations and a description of their direct and
indirect interests, by security holdings or otherwise, is or will
be contained in the proxy statement/prospectus and other relevant
materials filed with the SEC. This press release shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to appropriate registration or qualification under
the securities laws of such jurisdiction. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended.
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SOURCE Jersey Partners Inc.