Under the terms of the takeover, GLG shareholders will receive $4.50 in cash for each share of GLG common stock, representing a premium of approximately 55% to the GLG closing price on 14 May. The acquisition is expected to complete by the end of September 2010, with GLG to become a wholly owned subsidiary of Man at that time.
The deal will give Man an opportunity to grow its business in the US. It says there is a low correlation of performance between its quantitative investment style and the discretionary investment style of GLG, providing greater stability in the combined performance fee prospects and the creation of new high margin products.
Man has identified annual potential cost savings of approximately $50m with one third expected to be achieved in the financial year ending in 2011 and the balance expected in the first six months of the financial year ending in 2012.
Jon Aisbitt, chairman of Man, said: “It is central to Man’s stated strategy of acquiring high quality discretionary investment management capability to broaden our range of diversified, liquid strategies for the benefit of our investors. The combination of the two businesses aligns the interests of both firms’ fund investors, management and shareholders and creates a well capitalised industry leader.”
Noam Gottesman, chairman and Co-CEO of GLG, added: "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 recommended approval 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.”
