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FXCM proposes acquisition of Gain Capital

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FXCM, an online provider of foreign exchange trading and related services, is proposing to merge with and acquire Gain Capital.

 
The proposal was communicated this evening in a letter from FXCM to Gain’s board of directors, to inform them of FXCM’s desire to reach agreement on a transaction that would create the industry leader in online FX trading.
 
“FXCM believes that the substantial potential operating and capital synergies between the two companies would result in an accretive deal with a strong growth profile and improved economies of scale,” says Drew Niv (pictured), chief executive of FXCM. “Additionally, FXCM believes customers of both FXCM and Gain will greatly benefit from the expected improvement of financial strength and stability of the combined entity.
 
“This proposed merger is the highest priority for FXCM, and we hope that Gain is as excited as we are about the potential a combined company could have.”
 
The proposed transaction would give Gain shareholders 0.3996 shares of FXCM Class A common stock for each share of Gain common stock. Based on FXCM’s closing price of USD13.39 on 8 April 2013, this results in an offer price of USD5.35 per share of Gain common stock, which in aggregate would represent USD210.4m in total value. This price represents a 25 per cent premium to Gain’s closing share price on 8 April. FXCM is also prepared to offer up to USD50m in cash consideration in lieu of FXCM shares.

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