This week, Man Group announced that it had reached an agreement to acquire hedge fund group GLG Partners. Britain-based Man Group will buy GLG for approximately $1.6 billion, creating a combined alternative-investment manager with about $63 billion in assets under management.
Man Group expects the merger to result in many benefits for shareholders of both firms, including new potential for open-ended products, greater synergy between the two firms’ investment philosophies, and better geographical distribution. According to Man Group’s presss release, “the low correlation of performance between the quantitative investment style of Man and the discretionary investment style of GLG, providing greater stability in the combined performance fee prospects and the creation of new high margin products for distribution.”
The deal has received unanimous support from the GLG Board of Directors and features a concurrent cash merger and share exchange.The deal itself represents a 50% premium on GLG stock’s trading price on Friday, May 14th. Financing will be done with Man stock, at a ratio of about 1.085 Man shares per GLG share of common stock. GLG is also purchasing all outstanding warrants in cash for $.129 per warrant. By third quarter 2010, the merger is set to be finalized, at which point GLG Partners will be a wholly owned subsidiary of Man Group.
Noam Gottesman, Chairman and Co-CEO of GLG commented "This is a transformational step for GLG... We have known Man for many years and can be certain that our two businesses are highly complementary, both focused on delivering long-term performance but each with differing client bases and uncorrelated investment strategies. The combination of Man's outstanding distribution and structuring capabilities together with our industry leading investment teams will benefit all stakeholders, particularly investors in our funds whose interests will be exceptionally well served from within the combined group. The independent committee of our Board has unanimously recommended acceptance of the cash merger to our shareholders, and as a management team we are looking forward to working with our new colleagues at Man following the close of this transaction."
GLG Partners LP was founded in 1995 as a division of Lehman Brothers and was restructured as a separate entity in 2000. The three founding partners, co-CEO Noam Gottesman, Senior Managing Director Pierre Lagrange, and former partner Philippe Jabre, were previously traders at Lehman. |
