NEW YORK: Refco Inc., which has filed for bankruptcy protection following an accounting scandal in September, said there are five bidders for its futures brokerage business, which is likely to fetch $1 billion. The company will conduct an auction for the assets on Wednesday, when the current bids are expected to be revised upwards.
The five suitors are identified as privately-held Interactive Brokers Group (bid price $858 million), Dubai government investment arm-Yucaipa Companies combine (bid price $828 million), Alaron, a Chicago futures and options broker (which had bid for the private client business and hence for a smaller sum), Man Group Plc., a London-based hedge fund company and broker, and U.S. private equity firm J.C. Flowers & Co. The last two companies have not publicly discussed their offer prices.
Refco, the No 4 U.S. futures broker, had lost about half the value of its U.S. customer accounts following a fraud charge against its chief executive Philip Bennet. It had $ 6.5 billion in customer accounts at its U.S. futures units as of 30 September before it filed for bankruptcy protection, the 14th largest bankruptcy in U.S. history.
Customer accounts at the company's global futures units, including the U.S., had slid to $3.4 billion as of 24 October. The remaining customer accounts are the primary assets the company is planning to auction to the bidders. The sale proceeds will be used to pay debts.
Ahead of the bid process, Refco's bonds traded at 77 cents on the dollar, hovering around their highest level since 11 October, before Refco filed for bankruptcy.
Posted
on : Tue, 08 Nov 2005 10:25 GMT | Business News
By : Mark Richardson
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