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GFI Investors Urged by ISS to Reject CME Offer in Favor of BGC

Howard Lutnick’s BGC Partners Inc. won a new supporter in his bidding war with CME Group Inc. to take over interdealer broker GFI Group Inc. as Institutional Shareholder Services sided with him.

Shareholders should agree to BGC’s latest offer of $6.10 a share unless CME raises its bid at least that high, according to a report today from ISS, a firm that makes recommendations to investors on proxy fights. CME’s offer of $5.85 a share, which is supported by GFI management, may not be any more likely to succeed than BGC’s, ISS said.

“It is not at all clear that unaffiliated shareholders incur any greater risk of the deal breaking by holding out for the economically superior offer,” ISS said in the report.

BGC, part-owned by Lutnick’s Cantor Fitzgerald LP, has been vying with CME to take over New York-based GFI since September, when Lutnick said his firm would top CME’s previously announced deal for the brokerage. The companies compete in the shrinking market to broker large transactions between banks.

GFI advanced 1.9 percent to $6.07 at 10:46 a.m. in New York. The company’s shareholders are scheduled to vote on CME’s offer on Jan. 27.

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