FXCM says it will get circa $55.6 million for its 34.5% non-controlling equity interest in FastMatch.
A follow-up to the big piece of news from earlier today, as Euronext is acquiring a 90% stake in FastMatch.
FXCM, which has a 34.5% non-controlling equity interest in FastMatch, according to the Q1 2017 report filed by Global Brokerage Inc (NASDAQ:GLBR), has just provided some numbers on the deal. Let’s note that these numbers are published in a press release and we may have more certainty if we see a SEC filing.
As per the press release, FXCM Group will receive approximately $55.6 million for its interest in FastMatch, with a portion held in escrow and subject to certain future adjustments including a share of a $10 million earnout if certain performance targets of FastMatch are met.
Although the buyer has not been known, FXCM has been looking to sell its stake in FastMatch since early 2015 as it has been seeking to repay its loan to Leucadia. Following the February 2017 events which tarnished the reputation of FXCM, FastMatch reshuffled its board of directors and reiterated its independence from the broker.
Other institutional businesses in which FXCM has interests and are labelled for sale are Lucid Markets and V3 Markets.
FXCM is under pressure to get funds as the clock is ticking for the repayment of the Leucadia loan. Moreover, Global Brokerage, which has an indirect effective 37.3% ownership of FXCM Group LLC, is having hard time remaining listed on NASDAQ. Earlier this month, NASDAQ sent a notice to Global Brokerage informing it that due to its low market capitalization it does not comply with listing requirements and may be delisted. The company has warned that in case of delisting from NASDAQ, which may happen in about six months, it also faces a risk of default.
The sale of FXCM’s stake in FastMatch has been expected to be a significant one. How much cash the disposal of other businesses that are actively marketed for sale by FXCM will bring is questionable.