BGCP BGC Partners Inc

ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT

On May 26, 2021, Tower Bridge (One) Limited (the “Seller”), an indirect subsidiary of BGC Partners, Inc. (“BGC Partners”), and BGC Partners (as the Seller guarantor) entered into an Agreement (the “Purchase Agreement”) with Ardonagh Specialty Holdings 2 Limited (the “Buyer”) and The Ardonagh Group Limited (as the Buyer guarantor). The Purchase Agreement provides that at closing, the Buyer will purchase the entire issued share capital (the “Shares”) of each of Ed Broking Group Limited and Besso Insurance Group Limited (each wholly owned subsidiaries of the Seller) (together, the “Group”), for a purchase price of $500 million in cash to be paid at closing (the “Proposed Transaction”). These entities represent the BGC Partners’ insurance brokerage business.  The $500 million in cash to be paid at closing is subject to adjustment for working capital calculations.

Each party makes customary representations and warranties in the Purchase Agreement, as well as customary covenants relating to the operations of the Group and the Proposed Transaction between signing and closing. The parties have agreed to certain additional covenants, including that for three years after the consummation of the Proposed Transaction, the Seller shall ensure that BGC Partners and its subsidiaries will not engage in the operation of a competing business, subject to certain exceptions.  

The Purchase Agreement provides that consummation of the Proposed Transaction is subject to the satisfaction or waiver of certain conditions, including obtaining approval from certain regulatory authorities in respect of the change of ownership of the Group (the “Regulatory Conditions”). The Purchase Agreement is also subject to termination under certain circumstances, including if: (i) the Regulatory Conditions are not satisfied within five months following submission of the relevant applications, subject to certain extensions; (ii) a material adverse change (limited to significant regulatory issues only) occurs; or (iii) either party gives notice of termination due to the other party’s non-compliance with its respective covenants in relation to closing under the Purchase Agreement.

Equity awards previously granted by BGC Partners to employees of its insurance brokerage business will be converted into the right to receive a cash payment from BGC Partners; 50% vests and is paid in cash at closing of the Proposed Transaction and 50% vests and is paid in cash two years after closing, if the applicable employee remains an employee of the Buyer.

Cantor Fitzgerald & Co. served as advisor to the Seller and, upon the closing of the Proposed Transaction, will receive a fee consistent with market rates in connection with the Proposed Transaction.

The Proposed Transaction is currently expected to close in the second half of 2021, subject to receipt of the required regulatory approvals and satisfaction of other closing conditions.

The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of such document.

On May 26, 2021, BGC Partners issued a press release announcing the Proposed Transaction. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference in response to this Item 1.01.