UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2018

 

 

BGC Partners, Inc.

(Exact name of Registrant as specified in its charter)

 

 

 

Delaware   0-28191   13-4063515

(State or other jurisdiction of

incorporation)

  (Commission
File Number) 		  (I.R.S. Employer
Identification No.)

499 Park Avenue, New York, NY 10022

(Address of principal executive offices)

Registrant’s telephone number, including area code: (212) 610-2200

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

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Emerging growth company

 

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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

 

 

 

Item 1.01.

Entry into a Material Definitive Agreement.

The information required by this Item 1.01 is set forth under “ Credit Agreement Amendment ” in Item 8.01 below and is hereby incorporated by reference in response to this Item.

 

Item 8.01.

Other Events.

Distribution (Spin-Off)

On November 13, 2018, BGC Partners, Inc. (“BGC Partners”) announced that its board of directors (the “Board”) had authorized and declared the distribution to BGC Partners’ stockholders of all of the shares of Class A common stock, par value $0.01 per share, of Newmark Group, Inc., its majority owned subsidiary (“Newmark” and such common stock, “Newmark Class A Common Stock”), and shares of Class B common stock, par value $0.01 per share, of Newmark (“Newmark Class B Common Stock” and, together with Newmark Class A Common Stock, “Newmark Common Stock”) that will be owned by BGC Partners as of immediately prior to the effective time of the Distribution (as defined below), in the form of a special pro rata stock dividend, with shares of Newmark Class A Common Stock held by BGC Partners distributed to the holders of shares of Class A common stock, par value $0.01 per share, of BGC Partners (“BGC Partners Class A Common Stock”), and shares of Newmark Class B Common Stock held by BGC Partners distributed to the holders of shares of Class B common stock, par value $0.01 per share, of BGC Partners (“BGC Partners Class B Common Stock” and, together with BGC Partners Class A Common Stock, “BGC Partners Common Stock”) (the “Distribution”). The Distribution will be effective as of 12:01 a.m., New York City time, on November 30, 2018 (the “Distribution Date”) to BGC Partners stockholders of record as of the close of business on November 23, 2018 (the “Record Date”). The Distribution was approved by the Audit Committee of the Board (the “Audit Committee”) and by the full Board upon the recommendation of the Audit Committee.

Based on the number of shares of BGC Partners Class A Common Stock and shares of BGC Partners Class B Common Stock outstanding as of November 7, 2018, BGC Partners estimates that the holder of each share of BGC Partners Class A Common Stock as of the Record Date will receive approximately 0.4613 of a share of Newmark Class A Common Stock in the Distribution, and the holder of each share of BGC Partners Class B Common Stock as of the Record Date will receive approximately 0.4613 of a share of Newmark Class B Common Stock in the Distribution. The final distribution ratio for the shares of Newmark Class A Common Stock to be distributed in the Distribution for each share of BGC Partners Class A Common Stock will be calculated by dividing the number of shares of Newmark Class A Common Stock owned by BGC Partners as of immediately prior to the effective time of the Distribution by the number of shares of BGC Partners Class A Common Stock outstanding on the Record Date. The final distribution ratio for the shares of Newmark Class B Common Stock to be distributed in the Distribution for each share of BGC Partners Class B Common Stock will be calculated by dividing the number of shares of Newmark Class B Common Stock owned by BGC Partners as of immediately prior to the effective time of the Distribution by the number of shares of BGC Partners Class B Common Stock outstanding on the Record Date. Following the Distribution, BGC Partners will no longer hold any shares of Newmark Common Stock.

No fractional shares of Newmark Common Stock will be distributed in the Distribution. Instead, BGC Partners stockholders will receive cash in lieu of any fraction of a share of Newmark Common Stock that they otherwise would have received in the Distribution.

Beginning on November 20, 2018, two business days prior to the Record Date and continuing through the close of trading on the Nasdaq Global Select Market on the Distribution Date, the following markets will exist in BGC Partners Class A Common Stock and Newmark Class A Common Stock (each of which will be traded on the Nasdaq Global Select Market):

 

  •  

BGC Partners Class A Common Stock “regular way” market (NASDAQ: BGCP): Shares of BGC Partners Class A Common Stock that trade in the “regular way” market will trade with “due bills,” which are entitlements to shares of Newmark Class A Common Stock to be distributed pursuant to the Distribution. Any holders of shares of BGC Partners Class A Common Stock who sell shares of BGC Partners Class A Common Stock outstanding as of the Record Date the “regular way” prior to or on the Distribution Date will also be selling their right to receive shares of Newmark Class A Common Stock in the Distribution in respect of those shares of BGC Partners Class A Common Stock.

 

  •  

BGC Partners Class A Common Stock “ex-distribution/when issued” market (NASDAQ: BGCPV): Shares of BGC Partners Class A Common Stock that trade in the “ex-distribution/when-issued” market will trade without an entitlement to shares of Newmark Class A Common Stock to be distributed pursuant to the Distribution.

 

  •  

Newmark Class A Common Stock “regular way” market (NASDAQ: NMRK): The “regular way” market is the same market for Newmark Class A Common Stock that has been in existence since Newmark completed its initial public offering in December 2017.

  •  

Newmark Class A common stock “when-issued” market (NASDAQ: NMRKV): The “when-issued” market for Newmark Class A Common Stock relates to the shares of Newmark Class A Common Stock that will be distributed to BGC Partners stockholders in the Distribution. Therefore, if a stockholder is entitled to receive shares of Newmark Class A Common Stock in the Distribution, such stockholder may trade the entitlement to such shares of Newmark Class A Common Stock, without the corresponding shares of BGC Partners Class A Common Stock owned by such stockholder, in the Newmark Class A Common Stock “when-issued” market.

All trades in the “regular way” markets will settle on the second trading day after the trade date. The “due bills” will settle on the second trading day after the Distribution Date. All trades in the “ex-distribution/when-issued” and “when-issued” markets will settle on the third trading day after the Distribution Date, irrespective of the trade date.

Newmark Class A Common Stock currently trades on the Nasdaq Global Select Market under the symbol “NMRK.” Newmark Class B Common Stock is not listed on the Nasdaq Global Select Market or any other stock exchange.

BGC Partners Class A Common Stock currently trades on the Nasdaq Global Select Market under the symbol “BGCP.” BGC Partners Class B Common Stock is not listed on the Nasdaq Global Select Market or any other stock exchange.

Investors are encouraged to consult with their financial advisors regarding the specific implications of trading shares of BGC Partners Common Stock or Newmark Common Stock prior to or on the Distribution Date.

The shares of Newmark Common Stock to be distributed will be delivered in book-entry form, subject to certain exceptions, as of the effective time of the Distribution, and BGC Partners stockholders who hold their shares through brokers or other nominees will have their shares of Newmark Common Stock credited to their accounts by their brokers or other nominees. The Distribution is intended to qualify as generally tax free to BGC Partners stockholders for U.S. federal income tax purposes.

For additional information, registered stockholders of BGC Partners should contact BGC Partners’ transfer agent, American Stock Transfer & Trust Company, LLC at (800) 937-5449 (toll-free) or (718) 921-8317. BGC Partners stockholders who hold their shares through brokers or other nominees should contact their brokers or other nominees directly.

A copy of the press release announcing the Distribution is attached as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

Credit Agreement Amendment

As previously disclosed, on September 8, 2017, BGC Partners entered into a Revolving Credit Agreement by and among BGC Partners, the lenders party thereto, and Bank of America, N.A., as Administrative Agent (the “Credit Agreement”), which was subsequently amended on November 22, 2017.

On November 9, 2018, BGC Partners, the lenders party thereto, and Bank of America, N.A. entered into an amendment to the Credit Agreement (the “Second Amendment”), which amends certain covenants, including the consolidated net worth covenant, to permit the consummation of the Distribution and includes a pro rata reduction in the lenders’ commitments from $400 million to $300 million on the date that is thirty days after the consummation of the Distribution.

The foregoing description of the Second Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Second Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.

Discussion of Forward-Looking Statements about BGC Partners and Newmark

Statements in this document regarding BGC Partners and Newmark that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. Except as required by law, BGC Partners and Newmark undertake no obligation to update any forward-looking statements. For a discussion of risks and uncertainties which could cause actual results to differ from those contained in the forward-looking statements, see BGC Partners’ and Newmark’s Securities and Exchange Commission filings, including, but not limited to, the risk factors set forth in these filings and any updates to such risk factors contained in subsequent Forms 10-K, Forms 10-Q or Forms 8-K.

 

Item 9.01.

Financial Statement and Exhibits.

(d) Exhibits

The exhibit index set forth below is incorporated by reference in response to this Item 9.01.

EXHIBIT INDEX

 

Exhibit No.

 

Description

10.1   Amendment, dated as of November 9, 2018, to the Revolving Credit Agreement, dated as of September  8, 2017, as amended, by and among BGC Partners, Inc., as the Borrower, certain subsidiaries of the Borrower, as Guarantors, the several financial institutions from time to time as parties thereto, as Lenders, and Bank of America, N.A., as Administrative Agent.
99.1   Press Release, dated November 13, 2018.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report on Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.

 

   

BGC Partners, Inc.

   

Date: November 13, 2018

   

By:

 

/s/ HOWARD W. LUTNICK

     

 

     

Name:  Howard W. Lutnick

     

Title:   Chairman and Chief Executive Officer

[Signature Page to Form 8-K, dated November 13, 2018, Regarding the Distribution of Shares of Newmark Common Stock]

Exhibit 10.1

SECOND AMENDMENT TO CREDIT AGREEMENT

This SECOND AMENDMENT TO CREDIT AGREEMENT (this “ Amendment ”) is entered into as of November 9, 2018, among BGC PARTNERS, INC., a Delaware corporation (“ BGC ”), the Lenders (defined herein) signatory hereto and BANK OF AMERICA, N.A., as administrative agent (in such capacity, together with its successors in such capacity, the “ Administrative Agent ”). Capitalized terms used herein and not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement (defined herein).

RECITALS

WHEREAS , BGC, Newmark Group, Inc., a Delaware corporation (“ SpinCo ”), the Guarantors from time to time party thereto, each of the Persons identified as a “Lender” on the signature pages thereto and each other Person that became a lender in accordance with the Credit Agreement (together with their successors and assigns, the “ Lenders ”) and the Administrative Agent previously entered into that certain Credit Agreement dated as of September 8, 2017 (as amended, restated, supplemented or otherwise modified prior to the date hereof, the “ Credit Agreement ”);

WHEREAS , the Acquisition Term Loan has been repaid in full and therefore, pursuant to Section  11.01(a)(vi) of the Credit Agreement, SpinCo has automatically been released as a Loan Party in all respects and BGC has been released as a Guarantor of the Obligations with respect to the Acquisition Term Loan;

WHEREAS , BGC has requested that the Lenders amend certain provisions of the Credit Agreement to, among other things, facilitate the spinoff of SpinCo from BGC; and

WHEREAS , the Lenders are willing to make such amendments to the Credit Agreement, in each case, in accordance with and subject to the terms and conditions set forth herein.

NOW, THEREFORE , in consideration of the agreements hereinafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1. Amendments to the Credit Agreement . Effective as of the Second Amendment Effective Date, the Credit Agreement is hereby amended as follows:

 

  (a)

Add the following new definition to Section  1.01 of the Credit Agreement in proper alphabetical order:

“ Newmark Distribution ” means the distribution by BGC to its stockholders of all of the shares of SpinCo’s common stock owned by BGC, such that shares of SpinCo’s Class A common stock would be distributed to the holders of BGC’s Class A common stock and shares of SpinCo’s Class B common stock would be distributed to the holders of BGC’s Class B common stock.

“ Newmark Spinoff ” means the series of transactions whereby, as a result of the Newmark Distribution, the majority of SpinCo’s issued and outstanding shares of common stock will be held by the stockholders of BGC and SpinCo will no longer be a Subsidiary of BGC.

  (b)

The definition of “Aggregate Revolving Commitments” is hereby amended to add the following sentence at the end of such definition:

On the date that is thirty (30) days after the occurrence of the Newmark Spinoff, the Aggregate Revolving Commitments shall automatically be reduced to an aggregate amount equal to $300,000,000, and each Lender’s Revolving Commitment shall be reduced on a pro rata basis as a result of such reduction in the Aggregate Revolving Commitments.

 

  (c)

Section  6.14 of the Credit Agreement is deleted in its entirety.

 

  (d)

Section  7.03(j) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(j) Indebtedness of SpinCo and its Subsidiaries (i) pursuant to the Mirror Debt, (ii) to the extent the proceeds of such Indebtedness are used to pay outstanding amounts under the Term Loan Facility and (iii) subject to the terms of Section  2.05(b)(i) , to the extent that at the time of (and after giving effect to) the incurrence of such Indebtedness, the Newmark Leverage Ratio does not exceed 2.50:1.00;

 

  (e)

Section  7.05(d) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(d) Dispositions of Equity Interests of SpinCo pursuant to (i) an initial public offering which may result in SpinCo becoming a less than wholly-owned Subsidiary of BGC, (ii) the issuance of additional Equity Interests of SpinCo and/or (iii) the Newmark Distribution; and

 

  (f)

Section  7.06 of the Credit Agreement is hereby amended by inserting as Section 7.06(d) the following:

“BGC may make the Newmark Distribution.”

 

  (g)

Section  7.11(c) of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

(c) Consolidated Net Worth . Consolidated Net Worth at any time to be less than the sum of (i) (A) with respect to any time prior to the date of the Newmark Spinoff, $1,400,000,000, (B) with respect to any time from the date of the Newmark Spinoff to the last date of the first fiscal quarter following the Newmark Spinoff, $575,000,000 and (C) with respect to any time following the first fiscal quarter following the Newmark Spinoff, the greater of (x) $575,000,000 and (y) 75% of the actual Consolidated Net Worth as of the last date of the first fiscal quarter following the Newmark Spinoff, plus , in each case (ii) an amount equal to (x) 50% multiplied by (y) the Net Cash Proceeds received by BGC or its Subsidiaries from the issuance and sale of Equity Interests of BGC or any of its Subsidiaries after the Closing Date, other than Equity Issuances pursuant to BGC’s at-the-market controlled equity offering program (at the market shelf) intended to offset share repurchases, redemptions, exchanges and other payments in connection with compensation plans or arrangements or from current or former employees and partners or their estates or from directors, consultants or charities, in each case consistent with historic practices.

 

2

2. Representations and Warranties . Each Loan Party hereby represents and warrants to the Administrative Agent and the Lenders that:

(a) It has taken all necessary corporate or other organization action to authorize the execution, delivery and performance of this Amendment.

(b) This Amendment has been duly executed and delivered by such Person and constitutes such Person’s legal, valid and binding obligation, enforceable against such Person in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(c) No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, BGC of this Agreement or any other Loan Document other than those that have already been obtained and are in full force and effect.

(d) After giving effect to this Amendment, the representations and warranties of BGC and each Guarantor contained in Article  V of the Credit Agreement are true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they are true and correct in all respects) on and as of the Second Amendment Effective Date, except to the extent that such representation and warranties specifically refer to an earlier date, in which case they were true and correct in all material respects (other than those representations and warranties qualified by materiality or Material Adverse Effect, in which case they were true and correct in all respects) as of such earlier date.

(e) After giving effect to this Amendment, no event has occurred and is continuing which constitutes a Default or an Event of Default.

(f) Except as specifically provided in this Amendment, the Obligations are not reduced or modified by this Amendment and are not subject to any offsets, defenses or counterclaims.

3. Second Amendment Effective Date Conditions . This Amendment shall become effective upon satisfaction or waiver of the following conditions (such date, the “ Second Amendment Effective Date ”):

(a) After giving effect to this Amendment, no Event of Default shall exist.

(b) Receipt by the Administrative Agent of a copy of this Amendment duly executed by BGC, the Required Lenders and the Administrative Agent.

For purposes of determining compliance with the conditions specified in this Amendment, each Lender that has signed this Amendment shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Second Amendment Effective Date specifying its objection thereto.

4. Miscellaneous .

(a) Amended Terms . On and after the Second Amendment Effective Date, all references to the Credit Agreement in each of the Loan Documents shall hereafter mean the Credit Agreement as amended by all terms of this Amendment. Except as specifically amended hereby or otherwise agreed, the Credit Agreement is hereby ratified and confirmed and shall remain in full force and effect according to its terms.

 

3

(b) Loan Document; Entirety; Further Assurances . This Amendment shall constitute a Loan Document under the terms of the Credit Agreement. This Amendment and the other Loan Documents embody the entire agreement among the parties hereto and supersede all prior agreements and understandings, oral or written, if any, relating to the subject matter hereof. BGC agrees to promptly take such action, upon the request of the Administrative Agent, as is necessary to carry out the intent of this Amendment.

(c) Counterparts . This Amendment may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging means (e.g., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Amendment.

(d) GOVERNING LAW; Jurisdiction; Waiver of Jury Trial; Etc . THIS AMENDMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The jurisdiction, service of process, waiver of venue and waiver of jury trial provisions of Sections 11.14 and 11.15 of the Credit Agreement are hereby incorporated by reference, mutatis mutandis.

(e) Costs and Expenses . BGC shall pay all reasonable and documented out of pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of counsel for the Administrative Agent) in connection with the preparation, negotiation, execution, delivery and administration of this Amendment.

[NO FURTHER TEXT ON THIS PAGE]

 

4

IN WITNESS WHEREOF , the parties hereto have caused this Amendment to be duly executed and delivered as of the date first above written.

 

BGC PARTNERS, INC. ,
a Delaware corporation
By:  

/s/ Steven McMurray

Name:   Steven McMurray
Title:   Chief Financial Officer

 

SECOND AMENDMENT TO CREDIT AGREEMENT

ADMINISTRATIVE AGENT:     BANK OF AMERICA, N.A.
    By:  

/s/ Paley Chen

    Name:   Paley Chen
    Title:   Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

LENDERS:     BANK OF AMERICA, N.A.
    By:  

/s/ Sherman M Wong

    Name:   Sherman M Wong
    Title:   Director

 

SECOND AMENDMENT TO CREDIT AGREEMENT

CAPITAL ONE, NATIONAL ASSOCIATION
By:  

/s/ Wallace Lo

Name:   Wallace Lo
Title:   Duly Authorized Signatory

 

SECOND AMENDMENT TO CREDIT AGREEMENT

CITIBANK, N.A.
By:  

/s/ Marina Donskaya

Name:   Marina Donskaya
Title:   Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

GOLDMAN SACHS BANK USA
By:  

/s/ Jamie Minieri

Name:   Jamie Minieri
Title:   Authorized Signatory

 

SECOND AMENDMENT TO CREDIT AGREEMENT

PNC BANK, NATIONAL ASSOCIATION
By:  

/s/ Alaa Shraim

Name:   Alaa Shraim
Title:   Senior Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

MIZUHO BANK, LTD.
By:  

/s/ Donna DeMagistris

Name:   Donna DeMagistris
Title:   Authorized Signatory

 

SECOND AMENDMENT TO CREDIT AGREEMENT

INDUSTRIAL AND COMMERCIAL BANK OF CHINA LTD., NEW YORK BRANCH
By:  

/s/ Letian Yan

Name:   Letian Yan
Title:   Relationship Manager
By:  

/s/ Shulin Peng

Name:   Shulin Peng
Title:   MD, Head of Financial Institutions

 

SECOND AMENDMENT TO CREDIT AGREEMENT

ASSOCIATED BANK, NATIONAL ASSOCIATION
By:  

/s/ Liliana Huerta Correa

Name:   Liliana Huerta Correa
Title:   Senior Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

BANKUNITED, N.A.
By:  

/s/ Paul Ferrara

Name:   Paul Ferrara
Title:   Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

STIFEL BANK & TRUST
By:  

/s/ Jeff Rombach

Name:   Jeff Rombach
Title:   Senior Vice President

 

SECOND AMENDMENT TO CREDIT AGREEMENT

REGIONS BANK
By:  

/s/ Hichem Kerma

Name:   Hichem Kerma
Title:   Director

 

SECOND AMENDMENT TO CREDIT AGREEMENT

Exhibit 99.1

 

LOGO    LOGO

BGC Partners Announces Spin-Off of Newmark

NEW YORK, NY – November 13, 2018 – BGC Partners, Inc. (NASDAQ: BGCP) (“BGC Partners”, “BGC”, or “the Company”), a leading global brokerage and financial technology company, today announced that its Board of Directors (the “Board”) has approved the distribution of all of the shares 1 of Newmark Group, Inc. (NASDAQ: NMRK) (“Newmark”) held by the Company to stockholders of BGC. The Company will distribute these Newmark shares through a special pro rata stock dividend (the “Spin-Off” or “Distribution”).

The Spin-Off will be effective as of 12:01 a.m., New York City time, on November 30, 2018 (the “Distribution Date”) to BGC stockholders of record as of the close of business on November 23, 2018 (the “Record Date”). Based on the number of common shares of BGC outstanding as of November 7, 2018, the Company estimates that, in the Distribution, stockholders of BGC Partners Class A common stock will receive approximately 0.4613 of a share of Newmark Class A common stock for every one share of BGC Partners Class A common stock held as of the Record Date. 2 Following the Spin-Off, BGC will no longer hold any shares of Newmark.

Management Comments

“We are pleased to have completed the steps necessary to separate Newmark from BGC,” said Howard W. Lutnick, Chairman and Chief Executive Officer of BGC and Chairman of Newmark. “The Spin-Off will enhance Newmark’s ability to execute its successful growth strategy and to create value for its investors as a focused Real Estate Services company. BGC’s Financial Services business expects to deliver strong returns to its stockholders as it invests in technology, hires profitably, and acquires accretively.”

Additional Information Regarding the Spin-off Transaction

Newmark’s Class A float will increase from approximately 23 million shares to approximately 150 million shares as a result of the Spin-Off. 3 The Newmark shares to be distributed will be delivered in book-entry form, subject to certain exceptions, at the effective time of the Distribution, and BGC Partners stockholders who hold their shares through brokers or other nominees will have their Newmark common shares credited to their accounts by their brokers or other nominees. The Spin-Off is intended to qualify as generally tax free to BGC stockholders for U.S. federal income tax purposes.

On or about November 26, 2018, BGC will send an information statement detailing the Distribution to its stockholders of record on the Record Date. BGC will post the information statement, along with an investor presentation discussing the Distribution, on its Investor Relations website at http://ir.bgcpartners.com. These materials will also be available at http://ir.ngkf.com . The Spin-Off is subject to certain conditions which are expected to

 

1  

This includes the shares of Newmark Class A and Class B common stock owned by BGC, as well as the shares of Newmark common stock into which the limited partnership units of Newmark Holdings, L.P. and Newmark Partners, L.P. owned by BGC will be exchanged prior to and in connection with the Spin-Off.

2  

The ratio of shares of Newmark Class B common stock distributed in the Distribution in respect of each share of BGC Partners Class B common stock (which is not publicly traded) outstanding on the Record Date will be identical. The actual distribution ratio will be determined based on the respective number of shares of BGC Class A and Class B common stock outstanding on the Record Date and the respective number of shares of Newmark Class A and Class B common stock held by the Company immediately prior to the effective time of the Distribution.

3  

The float is defined as Class A common shares not owned by Cantor Fitzgerald, L.P. or its affiliates or by the executive officers and directors of Newmark. BGC’s stockholders will receive cash in lieu of any fraction of a share of Newmark common stock that they otherwise would have received.

be satisfied on or prior to the Distribution Date and described in the information statement. No vote or action is required by BGC Partners stockholders in order to receive the distribution of shares of Newmark common stock in the Distribution. For more information on the Spin-Off, including a discussion of trading in shares of BGC and Newmark prior to the Record Date and up to and including the Distribution Date, please see BGC’s Securities and Exchange Commission filing on Form 8-K, which is expected to be filed shortly.

Goldman Sachs & Co. LLC, Cantor Fitzgerald & Co. and BofA Merrill Lynch served as financial advisors to BGC in connection with the spin-off, while Wachtell, Lipton, Rosen & Katz and Morgan, Lewis & Bockius LLP served as legal advisors.

About BGC Partners, Inc.

BGC Partners is a leading global brokerage and financial technology company. BGC offers Real Estate Services through its publicly traded subsidiary Newmark Group, Inc. BGC owns GFI Group Inc., a leading intermediary and provider of trading technologies and support services to the global OTC and listed markets. BGC’s Financial Services offerings include fixed income securities, interest rate swaps, foreign exchange, equities, equity derivatives, credit derivatives, commodities, futures, and structured products. BGC provides a wide range of services, including trade execution, broker-dealer services, clearing, trade compression, post trade, information, and other services to a broad range of financial and non-financial institutions. Through brands including Fenics, BGC Trader, Capitalab, Lucera, and Fenics Market Data, BGC offers financial technology solutions, market data, and analytics related to numerous financial instruments and markets. BGC, BGC Trader, GFI, Fenics, Fenics Market Data, Capitalab, and Lucera are trademarks/service marks and/or registered trademarks/service marks of BGC Partners, Inc. and/or its affiliates.

BGC’s customers include many of the world’s largest banks, broker-dealers, investment banks, trading firms, hedge funds, governments, corporations, property owners, real estate developers, and investment firms. BGC’s common stock trades on the NASDAQ Global Select Market under the ticker symbol (NASDAQ: BGCP). BGC Partners is led by Chairman and Chief Executive Officer Howard W. Lutnick. For more information, please visit http://www.bgcpartners.com. You can also follow BGC at https://twitter.com/bgcpartners, https://www.linkedin.com/company/bgc-partners and/or http://ir.bgcpartners.com/Investors/default.aspx.

About Newmark Group, Inc.

Newmark Group, Inc. (“Newmark Group”) is a publicly traded company that, through subsidiaries, operates as a full-service commercial real estate services business with a complete suite of services and products for both owners and occupiers across the entire commercial real estate industry. Under the Newmark Knight Frank name, the investor/owner services and products of Newmark Group’s subsidiaries include capital markets (including investment sales), agency leasing, property management, valuation and advisory, diligence and underwriting. The company’s subsidiaries also offer government sponsored enterprise lending, loan servicing, debt and structured finance, and loan sales. Newmark Group’s occupier services and products include tenant representation, global corporate services, real estate management technology systems, workplace and occupancy strategy, consulting, project management, lease administration and facilities management. Newmark Group enhances these services and products through innovative real estate technology solutions and data analytics designed to enable its clients to increase their efficiency and profits by optimizing their real estate portfolio.

 

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Newmark Group has relationships with many of the world’s largest commercial property owners, real estate developers and investors, as well as Fortune 500 and Forbes Global 2000 companies. Newmark Group, which is listed on the NASDAQ Global Select Market under the symbol “NMRK”, is a publicly traded subsidiary of BGC. Newmark is a trademarks/service marks and/or registered trademarks/service marks of Newmark Group, Inc. and/or its affiliates. Knight Frank is a service mark of Knight Frank (Nominees) Limited. Find out more about Newmark at http://www.ngkf.com/, https://twitter.com/newmarkkf, https://www.linkedin.com/company/newmark-knight-frank/, and/or http://ir.ngkf.com/investors/investors-home/default.aspx.

Discussion of Forward-Looking Statements about BGC and Newmark

Statements in this document regarding BGC and Newmark that are not historical facts are “forward-looking statements” that involve risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements. Except as required by law, BGC and Newmark undertake no obligation to update any forward-looking statements. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see BGC’s and Newmark’s Securities and Exchange Commission filings, including, but not limited to, the risk factors set forth in these filings and any updates to such risk factors contained in subsequent Forms 10-K, Forms 10-Q or Forms 8-K.

Media Contact:

Karen Laureano-Rikardsen

+1 212-829-4975

Investor Contacts:

Ujjal Basu Roy (BGCP), Kelly Collar (NMRK), or Jason McGruder

+1 212-610-2426

 

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