Flowers Halts Bid for Refco Brokerage Unit

Private equity firm J.C. Flowers & Co. on Monday withdrew its bid for the futures brokerage business of Refco Inc. as other suitors joined the race, including a partnership of Los Angeles billionaire Ron Burkle and the Dubai government.

Flowers pulled its $768-million bid after a U.S. Bankruptcy Court judge said it must sharply reduce a break-up fee included in the deal.

U.S. broker-dealer Interactive Brokers Group has made the highest known offer. Interactive raised its bid Monday to about $858 million, topping a new bid worth $828 million from a partnership of the Dubai government and Yucaipa Cos.

Yucaipa is the investment firm of Burkle, who owns stakes in distributors of food and entertainment products. Burkle owns the Pittsburgh Penguins of the National Hockey League together with Mario Lemieux.

New York-based Refco began disintegrating two weeks ago after Chief Executive Phillip Bennett was charged with securities fraud over hidden debt. The scandal caused some clients to pull their assets.

In addition to the Dubai-Yucaipa partnership, new suitors include brokerage firm Man Financial, a part of British hedge fund Man Group, and New York-based Marathon Asset Management. Sources said U.S. private equity firm Apollo Management also was interested.

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Dow Jones/Associated Press was used in compiling this report.