<B>Who Might Buy MF Global?</B>
By Jacob Bunge and Aaron Lucchetti
MF Global Holdings Ltd.âs decision to explore options including a sale or asset sales puts into play a business who parts have varying appeal, analysts say.
The New York-based firm is a broker for futures and commodities trading, a business that also involves clearing other brokersâ derivatives trades on exchanges. MF Globalâs clients include retail investors and commodity producers.
The company also trades using its own money, a newer and riskier business for MF Global. The firm also is in the early stages of building an investment-banking operation and recently announced a $3.8 million acquisition of a trading-technology platform.
MF Globalâs commodities and futures trading business might be attractive to deep-pocketed financial firms seeking to build a global business in exchange-traded derivatives, observers said. With new financial regulations expected to push more trading business to exchanges and clearinghouses in coming years, that business could prove increasingly lucrative, they said.
It could draw the interest of foreign-based firms, such as Australian banking firm Macquarie Group, which already has a large commodities, currency and derivatives trading business. A Macquarie spokeswoman declined to comment.
Some analysts said MF Global could prove interesting to Interactive Brokers Group Inc., already an established player in derivatives trading. If nothing else, analysts said, Interactive Brokers may covet MF Globalâs customer accounts. A spokeswoman for Interactive Brokers declined to comment.
The analysts said MF Globalâs retail brokerage could be attractive to other retail brokers generally. In recent months, MF Global has worked to streamline its retail brokerage operations.
One sign that doesnât bode well for MF Globalâs sale prospects is that a competitor is also in the market for a sale: Newedge, a futures brokerage owned by Societe Generale and Credit Agricole.
Newedge is much larger than MF Global in terms of customer deposits. Given MF Globalâs exposure to European sovereign debt woes, Newedge might prove more attractive to suitors, analysts said. A spokesman for Newedge had no immediate comment.
Investors on Wednesday first appeared to be skeptical about odds of an MF Global sale. Shares were down as much as 42% on Wednesday, after The Wall Street Journal reported that MF Global had hired Evercore Partners and another adviser to look at the companyâs strategic options. MF Global shares closed the trading session down 8.6% at $1.70.
http://blogs.wsj.com/deals/2011/10/26/who-might-buy-all-or-parts-of-mf-global/
