The REFCO bid apparently was only about cheap publicity and getting intelligence on REFCO's business. They did not even present a bid at the auction
then I guess a number of people within the firm putting in 80+ hour weeks studying the deal and all the attorney's conducting due diligence were wasting their time. you do not know the inside details of the auction process, do not know the details of the IB bid and certainly do not know what you are talking about.
From the article: "We felt that if we mixed this with another model, we would lose what is so special about us and what we are so proud of," Mr. Peterffy said. Agreed. To me, it seems like the makers of laser surgery for eye correction, were bidding on an eye glass company. Granted, there may be a lot of money in eye glasses, but the future is laser surgery. Convincing all those eye glass customers to get laser surgery would have been quite a task. I would be curious to see IB's planned approach to handle the "Pit traded" contracts like REFCO (if they would have won the bid). If this was innovative, then this could have an interesting story.
IB does offer pit trading, but not on the retail side. However, we need a solution for futures options (Treasury, Spoo, all Commodities) and commodity futures (Nymex, Nyce/Nybot, any Metals). I see no possibility volume in these will go electronic any time soon (<5yrs)
I do know that IB did NOT present a bid at the actual auction. JCFlowers, the Dubai group, Man & Cerebrus were the only bidders at the auction, with MAN and Cerebrus going all night until Thursday a.m. after JC and Dubai dropped out I also know that I could not see how IB felt it could integrate it's business with REFCO. They just were not compatible. This was a known fact ab initio. Finally, of all the bidders IB was most aggressive in it's campaiging, media interviews, press releases, ads seeking REFCO customers, etc. Couple that with the fact that they sign a confidentiality agt, conduct "due diligence" and at the auction are the ONLY party not to bid and you hopefully see my point. I remain convinced it was a media campaign plus a relatively cheap way to get market intelligence on a dying competittor. Very shrewd. I might not do it, but nothing wrong with that....