To acquire BGC, eSpeed will issue in the merger an aggregate of 133,860,000 shares of its common stock and rights to acquire shares of its common stock. In the transaction, eSpeed's shares are being valued at $9.75 per share, a 6.09% premium to the closing price of eSpeed's Class A common stock on May 29, 2007. But this is significantly less than the $12 cash per share offered for eSpeed by London-based brokerage Tullett Prebon in April, which was turned down by Cantor.

The move could placate activist hedge fund investors in eSpeed, who had been concerned about corporate governance and the relationships between the three entities.

In combining eSpeed and BGC, Cantor says it will be consolidating its large inter-dealer broker businesses in one public entity, thereby facilitating future business combinations. The Joint Services Agreement and Administrative Services Agreement between eSpeed and Cantor will be terminated at the closing of the merger, Cantor and eSpeed will no longer provide collaborative marketplaces, and revenue sharing between them will be terminated.

For transition purposes and convenience, at closing, the combined company will enter into a new back-office operating and administrative services agreement with Cantor that Cantor says is designed to create scale efficiencies and reduce overall costs. Services under the new agreement will be charged to both companies at cost. The agreement has an initial three-year term and thereafter may be cancelled by either party on six months' notice.

The combined company's 2007 projected revenues are expected to be approximately $1 billion. For 2008, the combined company's projected revenues are expected to increase by more than 12% and to exceed $1.1 billion in annual revenues.