IB Really Wants REFCO, IB now top bidder at $858M
- Thread starter CPTrader
- Start date
def
Sponsor
Quote from 2cents:
except they didn't...
funny thing is, thanks to Drain's decisions, now all parties can safely rescind / lower their bids, ask for more time to perform proper DD etc, allow customer flight to continue full throttle... whats 10x% of $0 again?))
if you knew all the details and conditions you'd have a better understanding of why no one else bid the first weekend.
i'm sure def, but i don't... do u?
seems to me that customer flight wld likely have been much faster shld there have not been such an early bid, only possible after the chap 11 filing, by a credible group such as the one led by flowers... (try to imagine domino pizza bidding on the first week-end, instead of flowers, think that wld have stopped customer flight much?)
Def,
could you make a statement what IB
is targeting at in bidding for Ref ?
Do you primarily want just Ref's operating business and their customers or do you want to integrate Ref's stuff into your ops?
I understand that the last word has not been spoken here, just what's your basic plan ??
could you make a statement what IB
is targeting at in bidding for Ref ?
Do you primarily want just Ref's operating business and their customers or do you want to integrate Ref's stuff into your ops?
I understand that the last word has not been spoken here, just what's your basic plan ??
For all their talk about being the biggest gorilla on the street, the 'vibe' I got from Refco was very unprofessional...and decidely lacking in concern for the customer's welfare.
Even a firm like IB, which is a FRACTION of their size, knows better than to issue passwords for their trading platform that are simply letters from the user's NAME!! :eek:
Interactive Brokers Would Operate Refco As Separate Unit
By JED HOROWITZ
October 26, 2005 2:56 p.m.
Of DOW JONES NEWSWIRES
NEW YORK -- Interactive Brokers Group, the electronic options and futures trading firm in the running to take over the futures brokerage businesses of Refco Inc. (RFXCQ), would operate those businesses as an independent unit, the Connecticut firm said Wednesday.
Interactive, which also has been aggressively courting Refco brokerage customers through newspaper advertisements, has said it is willing to buy the Refco businesses for 115% of their net regulatory capital, or about $857.9 million, based on current estimates.
Interactive Chairman Thomas Peterffy said in a prepared statement Wednesday that Refco's customers and sales people would be able to retain their current commission and pay structures, while their trades would be processed through Interactive's "more efficient" systems.
The comments appeared to be an attempt to keep Refco customers and salespeople from defecting to other firms.
"The sales force and online customers would be free to choose between Refco's and Interactive Brokers' front-end devices and trading tools," Peterffy said.
Interactive's account management, order routing, execution and other technology systems will "greatly enhance the sales force's ability to service" their customers, he said.
Interactive has only about 20 salespeople worldwide and focuses on active professional traders, including hedge funds and people who trade on futures exchanges, spokeswoman Isabelle Clary said.
Refco "is much more top-heavy," she said, and has a more diversified customer base, including those who tend to hold their positions longer than the typical Interactive customer. Both firms have a reputation as low-cost providers for active traders.
Units On Block
Parent company Refco Inc. and 23 affiliates filed for bankruptcy-law protection Oct. 17 after reaching an understanding to sell the futures brokerage units to an investment group led by private-equity firm J.C. Flowers & Co. for $768 million. Those units weren't part of the bankruptcy filing, but the U.S. Bankruptcy Court for the Southern District of New York must approve the sale.
Flowers withdrew the offer Monday, after the bankruptcy judge balked at a breakup fee and other protections Refco and Flowers had sought for the deal. This week, at least seven other potential bidders have emerged. None of the bids is yet formal, and due diligence is just getting under way.
Refco and the bidders have agreed to a Nov. 4 deadline for formal bids and a Nov. 9 auction. Interactive said Wednesday it will sign a confidentiality agreement in order to receive financial data from Refco.
Interactive's proposed price is the highest yet disclosed, but bids are expected to change after parties review Refco's books, lawyers said. DIGL Inc., a Delaware corporation formed by Dubai Investment Group LLC and The Yucaipa Companies LLC, said in a filing Sunday with the court that it's willing to pay 111% of the units' net regulatory capital, or a total of $828 million.
Rival futures brokerage firm Man Financial; Marathon Asset Management LLC; Merrill Lynch (MER), joined by Warburg Pincus LLC and Susquehanna International Group; Apollo Management, led by ex-Drexel banker Leon Black; and futures firm TradeLink LLC have also expressed interest in bidding, but haven't outlined prices.
With each passing day, customers have been transferring their accounts out of the Refco units, reducing the value of the businesses being auctioned. The firm has lost about $4.1 billion of customer accounts, or nearly 55% of what it held before it disclosed its problems on Oct. 10, a Refco lawyer said in bankruptcy court on Monday.
Interactive itself has received about $20 million a day from Refco customers, Peterffy told The Wall Street Journal. Clary said the firm won't actively solicit Refco customers once its current ad campaign commitments end.
Refco's problems were precipitated by its disclosure two weeks ago that its then-Chairman and Chief Executive Phillip Bennett owed it a previously undisclosed $430 million. The subsequent rapid withdrawal of customer assets from various Refco units led to a cash crunch and forced the bankruptcy filing. Bennett, who was placed on indefinite leave, has been arrested by federal authorities for securities fraud. His lawyers said he will fight the charge.
-By Jed Horowitz, Dow Jones Newswires; 201-938-4047; jed.horowitz@dowjones.com
By JED HOROWITZ
October 26, 2005 2:56 p.m.
Of DOW JONES NEWSWIRES
NEW YORK -- Interactive Brokers Group, the electronic options and futures trading firm in the running to take over the futures brokerage businesses of Refco Inc. (RFXCQ), would operate those businesses as an independent unit, the Connecticut firm said Wednesday.
Interactive, which also has been aggressively courting Refco brokerage customers through newspaper advertisements, has said it is willing to buy the Refco businesses for 115% of their net regulatory capital, or about $857.9 million, based on current estimates.
Interactive Chairman Thomas Peterffy said in a prepared statement Wednesday that Refco's customers and sales people would be able to retain their current commission and pay structures, while their trades would be processed through Interactive's "more efficient" systems.
The comments appeared to be an attempt to keep Refco customers and salespeople from defecting to other firms.
"The sales force and online customers would be free to choose between Refco's and Interactive Brokers' front-end devices and trading tools," Peterffy said.
Interactive's account management, order routing, execution and other technology systems will "greatly enhance the sales force's ability to service" their customers, he said.
Interactive has only about 20 salespeople worldwide and focuses on active professional traders, including hedge funds and people who trade on futures exchanges, spokeswoman Isabelle Clary said.
Refco "is much more top-heavy," she said, and has a more diversified customer base, including those who tend to hold their positions longer than the typical Interactive customer. Both firms have a reputation as low-cost providers for active traders.
Units On Block
Parent company Refco Inc. and 23 affiliates filed for bankruptcy-law protection Oct. 17 after reaching an understanding to sell the futures brokerage units to an investment group led by private-equity firm J.C. Flowers & Co. for $768 million. Those units weren't part of the bankruptcy filing, but the U.S. Bankruptcy Court for the Southern District of New York must approve the sale.
Flowers withdrew the offer Monday, after the bankruptcy judge balked at a breakup fee and other protections Refco and Flowers had sought for the deal. This week, at least seven other potential bidders have emerged. None of the bids is yet formal, and due diligence is just getting under way.
Refco and the bidders have agreed to a Nov. 4 deadline for formal bids and a Nov. 9 auction. Interactive said Wednesday it will sign a confidentiality agreement in order to receive financial data from Refco.
Interactive's proposed price is the highest yet disclosed, but bids are expected to change after parties review Refco's books, lawyers said. DIGL Inc., a Delaware corporation formed by Dubai Investment Group LLC and The Yucaipa Companies LLC, said in a filing Sunday with the court that it's willing to pay 111% of the units' net regulatory capital, or a total of $828 million.
Rival futures brokerage firm Man Financial; Marathon Asset Management LLC; Merrill Lynch (MER), joined by Warburg Pincus LLC and Susquehanna International Group; Apollo Management, led by ex-Drexel banker Leon Black; and futures firm TradeLink LLC have also expressed interest in bidding, but haven't outlined prices.
With each passing day, customers have been transferring their accounts out of the Refco units, reducing the value of the businesses being auctioned. The firm has lost about $4.1 billion of customer accounts, or nearly 55% of what it held before it disclosed its problems on Oct. 10, a Refco lawyer said in bankruptcy court on Monday.
Interactive itself has received about $20 million a day from Refco customers, Peterffy told The Wall Street Journal. Clary said the firm won't actively solicit Refco customers once its current ad campaign commitments end.
Refco's problems were precipitated by its disclosure two weeks ago that its then-Chairman and Chief Executive Phillip Bennett owed it a previously undisclosed $430 million. The subsequent rapid withdrawal of customer assets from various Refco units led to a cash crunch and forced the bankruptcy filing. Bennett, who was placed on indefinite leave, has been arrested by federal authorities for securities fraud. His lawyers said he will fight the charge.
-By Jed Horowitz, Dow Jones Newswires; 201-938-4047; jed.horowitz@dowjones.com