Reply #8: Refco sells core futures unit, files for bankruptcy [View All]

[UpInArms]

http://today.reuters.com/investing/financeArticle.aspx?type=bondsNews&storyID=2005-10-18T105742Z_01_N17266510_RTRIDST_0_FINANCIAL-REFCO-CHAPTER11-UPDATE-4.XML

NEW YORK, Oct 18 (Reuters) - Futures and commodities firm Refco Inc. (RFX.N: Quote, Profile, Research) has agreed to sell its core futures brokerage business to an investor group for $768 million and filed for bankruptcy protection along with several subsidiaries.

Private equity fund J.C. Flowers & Co. LLC, run by former Goldman Sachs (GS.N: Quote, Profile, Research) partner Christopher Flowers, is leading the investor group, which includes Enstar Group Inc. (ESGR.O: Quote, Profile, Research), a financial services investment firm in which Flowers is the largest shareholder.

The moves, announced late on Monday, came two months after Refco went public and a week after its stock sank on news that Chief Executive Phillip Bennett controlled an entity that hid $430 million in debt from Refco. Bennett was arrested last week and charged with securities fraud.

Silver Point Capital, MatlinPatterson Global Advisers LLC and Texas Pacific Group are also part of the investor group.

But Flowers could face competition. Dubai Investments, an investment arm of the Dubai government, has hired The Blackstone Group to advise it on a potential $1 billion acquisition of the entire company, a source close to the matter said on Tuesday.

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