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Last Update: 02-Apr-13 07:40 ET
BGC Partners shares soar 37% following deal to sell its US Treasury platform to Nasdaq (NDAQ)
BGC Partners (BGCP $5.40 +1.55) announced that it has entered into an agreement pursuant to which it will sell its benchmark, on-the-run, U.S. Treasury fully electronic trading platform to NDAQ. Total consideration for this transaction is up to $1.234 billion, consisting of $750 million in cash plus an earn-out of up to $484 million of NASDAQ OMX common stock to be paid ratably over 15 years. Under the terms of the purchase agreement, BGC will sell to NASDAQ OMX certain assets, including the eSpeed brand name and various contracts comprising the fully electronic portion of BGC's benchmark, on-the-run, U.S. Treasury brokerage, market data and co-location service businesses. The agreement also includes the employment by NASDAQ OMX of certain members of BGC staff and BGC's Rochelle Park data center. These assets will be sold to NASDAQ OMX for a purchase price of $750 million in cash, plus an earn-out of up to $484 million in NASDAQ OMX common stock to be paid ratably over 15 years following the closing. Should certain acceleration events occur, including NASDAQ OMX undergoing a change of control, whatever remains of the earn-out will be paid immediately at that time. BGC has agreed not to compete with NASDAQ OMX in fully electronic, on-the-run, benchmark U.S. Treasury Notes and Bonds for 3 years following the close of this transaction. The one-time gain related to the $750 million payment is expected to be accretive to BGC's GAAP earnings per share upon closing, but will not be included in the Company's results for distributable earnings. BGC Conference Call to Discuss Transaction Scheduled for Today at 6 PM ET.
