Gain Capital Rebuffs FXCM Takeover, Buys Global Futures & Forex

Gain Capital Holdings Inc., a provider of online foreign-exchange trading services, rejected a proposed acquisition by FXCM Inc. and instead agreed to purchase Global Futures & Forex Ltd.

FXCM made an unsolicited stock offer of $195 million for Gain Capital on April 8. The proposed transaction would “significantly undervalue” Gain Capital, the Bedminster, New Jersey-based company said today in a statement.

Gain Capital will pay about $108 million in cash, stock and debt for Sydney-based Global Futures, a provider of retail foreign-exchange and derivatives trading. The acquisition is expected to be completed in the third quarter of 2013. It will yield $35 million to $45 million in “operating synergies” in the first year after closing, according to a release from Gain Capital.

The transaction is a “significant opportunity to grow our business across the spectrum of retail and institutional products,” Gain Capital Chief Executive Officer Glenn Stevens said in the statement. A spokesman for Gain Capital didn’t immediately return a call seeking comment.

Shares of Gain Capital rose 3 cents to $5.65 at 9:52 a.m. in New York trading. The stock has risen about 14 percent in the past year.

First-quarter net income was $4.5 million, or 11 cents a share, compared with a loss of $1.3 million, or 4 cents, a year earlier. Revenue rose 50 percent to $49.8 million, Gain Capital said.

Gain Capital announced that it reached an agreement to acquire the U.S.-based retail customer accounts of FX Solutions LLC on Feb. 22. The firm previously bought the U.S. individual accounts of GFT Forex on Dec. 7, and completed the purchase of Open E Cry from Charles Schwab’s Option’s Express on Sept. 6.

The company also acquired the currency retail businesses of Capital Market Services LLC and MG Financial LLC in the second half of 2010 and a controlling stake in Japan’s Fortune Capital Co. in March 2009.