Interactive Brokers Group Bids For Refco's Futures Business

I'm guessing this is Interactive Broker's play for a big beach head in the institutional business. Not sure how much business IB does with the bigger hedge funds and CTAs, but Refco certainly has been one of the FCMs of choice in that world.

It would seem to me that IB would be a better bidder than JC Flowers since they can eliminate some overheads, whereas the JC Flowers group presumably needs the entire structure.
 
Seems like a mistake to associate with a sinking ship, especially if the customers are leaving anyway, and the full details of the story have yet to surface. What is IB getting into? Makes me leary. As far as I know IB has no acquisition experience either.
 
Quote from Cdntrader:

Refco receives rival bid for futures brokerage unit (RFXCQ) By Carla Mozee
SAN FRANCISCO (MarketWatch) -- Interactive Brokers Group said after Thursday's closing bell it has submittted a rival bid to buy Refco Inc.'s futures and commodities trading business. Interactive Brokers, a privately held firm in Greenwich, Conn., didn't specify the terms of its proposal but said it would be higher than the preliminary agreement, valued at $768 million, that Refco currently has with a private investor group led by J. Christian Flowers. Interactive Brokers said it's offering to pay 106% of net regulatory capital, rather than the 103% offered by Flowers.
More...

How on earth does Flowers expect to bank on cronyism when there are higher bids being offered?
 
Quote from paradox:

Seems like a mistake to associate with a sinking ship, especially if the customers are leaving anyway, and the full details of the story have yet to surface. What is IB getting into? Makes me leary. As far as I know IB has no acquisition experience either.
More...

sounds like something an IB customer would say.

before there was IB, there was a futures industry, you know. in fact, it goes back for generations.

I agree that IB has no acquisition (or much other) experience. But the problem isn't that "refco is a sinking ship" or that "all the customers are leaving." The problem is that IB is an upstart child of the JAVA generation.
 
saw this on bloomberg this am

-Interactive Brokers this week has taken out full-page ads in the New York Times, the Wall Street Journal, the Financial Times, and the Chicago Tribune inviting Refco customers to switch their business to Interactive Brokers.-
 
Quote from Cdntrader:


....

"Refco claimed to have had 250,000 futures account worldwide. I don't know of any others that are even claiming anywhere near that number," Kunda said.


......

"Since you are dealing with traders they will be looking for the best deals not only in the market but with who handles their accounts," Kunda said.

And Interactive is dealing with that competition by lowering its commissions, Sanders said.

....

Copyright © 2005, Southern Connecticut Newspapers, Inc.
More...


i think this speaks volumes about ib's approach to broking.

when will they learn that there is MUCH MUCH more to brokerage than low fees.

sure, we all want as low fees as possible, but whats the point if you cant get a reliable platform in the first place (notice another thread started today about ib bom not working on eurex)? poor customer service and an unreliable platform can cost you a lot more than the savings gained on low fees.

when will ib learn that the reason refco had 250k accounts was because they focused on reliability and service as well as competitive fees.
 
Quote from SethArb:

IB does not do floor brokerage to my knowledge

I think they just would like more of refco's
customer biz on screen trading derivatives
worldwide

I wonder how low refco's screen trading commissions were / are ?

:)
More...

good question.

refco would tailor a cost structure in line with the customers needs (platform, volume and product). they wouldnt force a blanket structure on everyone as they understood everyones needs are different.

this is why they never published costs.
 
You must log in or register to reply here.
Back
Top