Cantor Fitzgerald agreed to sell its BGC Partners brokerage unit to ESpeed Inc., a publicly owned electronic trading house controlled by Cantor, in a deal valued at $1.3 billion.
The acquisition would enable Cantor, a New York bond-trading firm that lost hundreds of employees in the Sept. 11 terror attacks, to consolidate its interdealer broker businesses and end all revenue-sharing accords with ESpeed, which some ESpeed investors have criticized.
Cantor, however, would retain voting control over the combined ESpeed-BGC, which would be called BGC Partners and trade on Nasdaq.
The current BGC said it would withdraw a proposal it made this year for a $460-million initial public offering.
The transaction values ESpeed's Class A shares 6.1% higher than their closing price Tuesday of $9.75 a share.
That's lower than a purported $12-a-share takeover offer for E- Speed made in April by British interdealer broker Tullett Prebon, according to reports at the time.
BGC, which had first-quarter revenue of $249 million, is valued at about $1.2 billion, based on ESpeed's stock price Tuesday.
Addressing concerns during a conference call Wednesday that the deal undervalues ESpeed, Howard W. Lutnick -- who will be chairman and co-chief executive of the combined company -- said the figure represented both a premium on ESpeed's stock price and a discount from what BGC wanted to go public at.