By Lisa Kerner
Charlotte, N.C., May 30 - eSpeed, Inc. and BGC Partners agreed to merge into a combined company known as BGC Partners, Inc. to be traded on the Nasdaq Global Market under the symbol "BGCP."
The board of directors of eSpeed has approved the deal and is recommending that its stockholders adopt the merger agreement.
To acquire BGC, eSpeed will issue a total of 133.86 million shares of its common stock and rights to acquire shares of its common stock. eSpeed's shares are being valued at $9.75 per share, or a 6.09% premium to the closing price on May 29, according to a company news release.
BGC will withdraw its proposed initial public offering of its common stock but will continue to use eSpeed's name as one of its electronic broking brands.
eSpeed investor Cantor Fitzgerald, LP, with an 87.7% stake in the company, agreed to vote its shares in favor of the merger.
Both the joint services and administrative services agreements between eSpeed and Cantor will be terminated at the closing of the merger, slated for the fourth quarter of 2007 or the first quarter of 2008.
The newly combined company will enter into a new back-office operating and administrative services agreement with Cantor designed to create scale efficiencies and reduce overall costs, the release stated.
eSpeed's special committee received a fairness opinion from Sandler O'Neill + Partners, LP.
BGC Partners is expected to have 2007 revenues of about $1 billion, with 2008 projected revenues expected to increase by more than 12% to $1.1 billion.
"We are extremely proud of each of these two companies and their strong positions in the marketplace," eSpeed chairman, chief executive officer and president Howard W. Lutnick said in the release.
"eSpeed is the technology driver of BGC's voice and electronic broking business, and BGC's performance drives eSpeed's growth. The integration of BGC's superior customer service, execution, and innovation with eSpeed's powerful technology platform represents an ideal strategic fit. By combining these considerable strengths, we will achieve improved operating efficiencies and strengthen our market position, serving the best long-term interests of eSpeed's stockholders, both companies' customers and BGC's employee-owners."
eSpeed is a New York-based trading technology company.
BGC is an inter-dealer broker that provides integrated voice and electronic execution and other services to banks, brokerage houses and investment banks. The company has offices in the United States, the United Kingdom and France.
| Acquirer: | eSpeed, Inc.
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| Target: | BGC Partners
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| Transaction value: | $7.3 billion
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| Price per share: | $9.75
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| Announcement date: | May 30
|
| Expected closing: | Fourth quarter of 2007 or first quarter of 2008
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