GLG Partners (GLG) acquired by Man Group for US$1.6 billion

By Michael Bogan

GLG Partners Inc. (NYSE: GLG) announced an agreement to be acquired by London-based Man Group plc. The acquisition by the 226-year-old hedge fund firm represents a cash-and-stock deal valued at approximately US$1.6 billion. Combined assets will total approximately US$63 billion.

Man's swap of its ordinary shares for GLG common shares at a 1.0856 exchange ratio equates to US$3.50 per GLG shares, a 20 per cent premium above Friday's US$2.91 closing price.

Additional terms of the agreement include a cash purchase of outstanding warrants at Friday's closing price of US$0.129 per warrant. Following the completion of the merger, warrants will become fully excersizable at the price of the merger consideration.

"This is a transformational step for GLG," said Noam Gottesman, Chairman and Co-CEO of 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."

The deal comes amid growing concerns among investors and the hedge fund community of asset value volatility during an historic time of unwinding decades-long global debt and currency imbalances between the major economies of the United States, Japan, UK and EC nations and their major emerging competitors of China, India, Brazil and Russia.

Dramat! ic redem ptions in the hedge fund industry has closed many firms, with consolidations and mergers expected by industry analysts in wake of steep losses reported since the fall of Bear Stearns in 2008.

Man said it intends to "expand its business across a broad range of hedge fund styles" in an effort to appeal to a wider range of investors. Since 1984, Man has expanded its alternative investment business to thirteen countries through investments made in world-class hedge fund subsidiaries located in the United States, United Kingdom and Switzerland.

The hedge fund industry is estimated to be worth US$1 trillion worldwide.

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