GFIG » Topics » FENICS ACQUISITION

This excerpt taken from the GFIG DEF 14A filed Apr 13, 2006.

FENICS ACQUISITION

        In April 2001, we acquired approximately 90% of the outstanding capital stock of Fenics. The purchase price of approximately $40.7 million consisted of an exchange of 1,656,189 shares of common stock of GFInet inc, our subsidiary, and assumption of debt of Fenics of approximately $9.0 million. This debt bore interest at rates between 9% and 11% and was fully repaid by February 2003.

        Within 120 days after the completion of our IPO, we were obligated to provide notice to the remaining holders of the outstanding capital stock of Fenics that a "liquidity event" has occurred and to attempt to purchase the remaining approximately 10% of the capital stock of Fenics at a per share price equal to the fair market value, as of the date of such notice, of 0.3274 shares of our Common Stock. On March 9, 2005, we made a written offer to purchase all of the ordinary shares in Fenics Limited not held by us for an amount equal to $8.37 per Fenics Limited share (the "Purchase Price"). The Purchase Price represents 0.3274 multiplied by $25.58, which was the average closing price of the Common Stock over the immediately preceding four

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calendar weeks. This offer was made to all minority shareholders of Fenics Limited and, in the aggregate, was an offer to purchase 532,098 ordinary shares of Fenics Limited for a total purchase price of $4.5 million.

        In April 2005, the Company legally became the sole shareholder of Fenics Limited. As of December 31, 2005, Fenics minority shareholders were paid approximately $4.2 million for 505,869 shares tendered to the Company, or approximately 95% of the outstanding minority shares. The remaining minority shares will be paid for when they are tendered to the Company.

        Certain of these remaining shares of Fenics were held by John W. Ward, one of our directors, and certain of our officers and employees. These persons received cash for those shares in connection with our purchase of these remaining Fenics shares.

This excerpt taken from the GFIG 10-K filed Mar 31, 2005.

Fenics Acquisition

        In April 2001, we acquired approximately 90% of the outstanding capital stock of Fenics. We acquired Fenics for the purpose of expanding our data, analytics and Internet product offerings. The purchase price of approximately $40.7 million consisted of an exchange of 1,656,189 shares of common stock of GFInet inc, our subsidiary, and assumption of debt of Fenics of approximately $9.0 million. This debt bore interest at rates between 9% and 11% and was fully repaid by February 2003.

        Within 120 days after the completion of our IPO, we were obligated to provide notice to the remaining holders of the outstanding capital stock of Fenics that a "liquidity event" has occurred and to attempt to purchase the remaining approximately 10% of the capital stock of Fenics at a per share price equal to the fair market value, as of the date of such notice, of 0.3274 shares of our common stock. On March 9, 2005, we made a written offer to purchase all of the ordinary shares in Fenics Limited not held by us for an amount equal to $8.37 per Fenics Limited share (the "Purchase Price"). The Purchase Price represents 0.3274 multiplied by $25.58, which was the average closing price of the GFI Group common stock over the immediately preceding four calendar weeks. This offer was made to all minority shareholders of Fenics Limited and, in the aggregate, is an offer to purchase 532,098 ordinary shares of Fenics Limited for a total purchase price of $4.5 million.

        Certain of the remaining shares of Fenics are held by John W. Ward, one of our directors, and certain of our officers and employees. These persons will receive cash for those shares in connection with our purchase of the remaining Fenics shares that we do not own as described under "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources."

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