NEW YORK: As many as six groups are in the field to buy the bankrupt Refco Inc.'s futures trading arm and the expected intense bidding process has given a new hope to the hundreds of the company's debtholders, who now see some increase in its bond prices.
However, one of the key bidders, the group led by U.S. private equity firm J.C. Flowers & Co., withdrew from the bidding process Monday.
The highest bid at the moment is that of U.S. broker-dealer Interactive Brokers Group -- at $858 million. Other prospective buyers are a group led by Merrill Lynch & Co. Inc. with private equity firm Warburg Pincus and Susquehanna International Group, Dubai Investment Group LLC, Marathon Asset Management, Apollo Management LLC and Man Group Plc's Man Financial.
Refco owes its creditors about $16 billion in total. The company and its 23 subsidiaries had filed for bankruptcy last week, just seven days after disclosing it had suspended chief executive Phillip Bennett for hiding $430 million he owed to the company. The company had gone public only in August. It faced a cash emergency as clients lost faith and started withdrawing their assets.
The company's futures brokerage is one of the last units still operational, but the value of customer accounts had fallen to $3.4 billion to $4.1 billion since last week.
J.C. Flowers & Co. said in a statement that it is "not prepared to commit at this time" to purchase the operation after the bankruptcy court overseeing the sale failed to grant a procedural motion. According to news reports, the firm withdrew after the bankruptcy judge lowered a breakup fee and barred an option that would have let the fund bid on other aspects of Refco's business.
Posted
on : Wed, 26 Oct 2005 09:25 GMT | Banking News
By : Rob Davis
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