Gain Capital Holdings Inc., which is a renowned provider of online foreign exchange trading services, has rejected a proposed acquisition by another known online trading service FXCM. Instead, it has agreed to buy Global Futures & Forex Ltd.
Incidentally, an unsolicited stock offer was made by FXCM for Gain Capital on 8th April and the total worth of the offer was $195 million. According to a statement released by Gain Capital, the proposed offer would have significantly undervalued the company, if the transaction was made based on that.
As far as the deal with Global Futures is concerned, Gain Capital will be paying around $108 million in cash, stock and debt. Global Futures, a Sydney based company, is provider of retail foreign exchange and derivatives trading. According to some sources, the transaction on this takeover should be completed by end of third quarter of 2013. In the statement released by Gain Capital, the company has claimed that this transaction will yield $35 million to $45 million in operating synergies in the very first year after closing.
Glenn Stevens, the Chief Executive Officer of Gain Capital stated that this transaction will serve as a great opportunity to grow the business across the spectrum of both institutional and retail products. However, the spokesman for Gain Capital declined to make any official comment on this transaction.
As the news came out, shares of Gain Capital increased by 3 cents and it is currently priced at $5.65. In the last year, the stocks of Gain Capital have gone ahead by 14% on a whole. According to the earnings statement released by Gain Capital, the first quarter net income of the company was at $4.5 million or 11 cents a share. Incidentally, a year earlier, the same was at 4 cents per share with a loss of $1.3 million.
It was announced by Gain Capital that it has completed an agreement to acquire the US based retail customer accounts of FX Solutions LLC on 22nd February. The firm earlier bought the US individual accounts of GFT Forex on 7th December and also completed the buyout of Open E Cry from the Option’s Express owned by Charles Schwab on 6th September, 2012. The currency retail businesses of both MG Financial LLC and Capital Market Services LLC were also bought by Gain Capital in the last 6 months of 2010.