Cowen Group, Inc. (“Cowen”) (NASDAQ: COWN) and LaBranche &
Co Inc. (“LaBranche”) (NYSE: LAB) today announced a definitive
merger agreement under which Cowen will acquire LaBranche, a
market-maker in options, exchange-traded funds and futures on
various exchanges domestically and internationally.
Under the terms of the merger agreement, Cowen will acquire
LaBranche in a stock-for-stock merger transaction valued at
approximately $192.8 million. LaBranche shareholders will receive
upon closing a fixed ratio of 0.9980 of a share of Cowen Class A
common stock for each outstanding share of LaBranche common stock.
The total Cowen shares to be issued to LaBranche shareholders will
represent approximately 35.1 percent of the combined company and
33.8 percent on a fully diluted basis. The transaction represents a
16 percent premium to LaBranche’s closing price on February 16,
2011.
Certain executive officers of LaBranche, holding approximately
12.5% of the outstanding shares of LaBranche, have entered into a
voting agreement with Cowen to vote their shares in favor of the
transaction, subject to the terms of the voting agreement. RCG
Holding LLC, which currently holds approximately 44.5% of the
outstanding shares of Cowen, entered into a voting agreement with
LaBranche to vote its shares in favor of the transaction, subject
to the terms of that voting agreement.
Upon closing, Michael LaBranche, Chairman, Chief Executive
Officer and President of LaBranche, will join Cowen’s Board of
Directors and will be appointed a Senior Managing Director. In
addition, Katherine E. “Wendy” Dietze, a Director of LaBranche,
will join Cowen’s Board of Directors at closing and William “Chip”
Burke, III, Chief Operating Officer of LaBranche, will join Cowen
as a Senior Managing Director.
Peter Cohen, Chairman and CEO of Cowen commented, “We believe
the combination of our two businesses will create value for both
Cowen shareholders and LaBranche shareholders. The combined
organization will benefit from an increased capital base and will
accelerate our time to market in a number of high growth areas in
sales and trading. Together, we will be able to pair LaBranche’s
robust information technology platform, proprietary electronic
trading systems and talented professionals with Cowen’s fundamental
research culture, customer-driven sales and trading capabilities in
equities and equity derivatives. We will also be in a position to
expand capital markets activities by leveraging LaBranche’s
licenses, including its Hong Kong exchange membership. LaBranche’s
senior management brings years of experience and relationships to
Cowen and we look forward to welcoming Michael, Chip and their team
to our firm.”
Added Cohen, “Following the Cowen/Ramius merger, we have
continued to reshape the investment bank, creating a partnership
culture, and driving improved performance in both the broker-dealer
and asset management businesses. Our fourth quarter results
demonstrate the progress we have made towards achieving our revenue
and profitability goals.”
“We are very pleased to be bringing our businesses into Cowen, a
strong and diversified financial services organization,” stated
Michael LaBranche, Chairman, Chief Executive Officer and President
of LaBranche. “LaBranche has undergone the important process of
aggressively restructuring its business model in the face of
difficult market conditions and is a strong fit for Cowen’s
platform. LaBranche and its shareholders also stand to benefit
significantly from Cowen’s excellent investment capabilities. The
senior management at Cowen has demonstrated over a long period of
time that they are excellent stewards of capital by generating
attractive risk adjusted returns on their own capital, seeding new
strategies and opportunistically investing in skilled
professionals. We believe that this transaction creates value in
the near- and long-term and we look forward to contributing to the
future success of the combined organization.”
The transaction, which is expected to close by the end of the
second quarter or beginning of the third quarter of 2011, is
subject to customary closing conditions and approval by LaBranche
shareholders and Cowen shareholders.
Sandler O'Neill & Partners, L.P. acted as exclusive
financial advisor to the Cowen Group Board of Directors, and
Willkie Farr & Gallagher LLP acted as legal advisor to Cowen on
this transaction. Keefe, Bruyette & Woods, Inc. acted as
exclusive financial advisor and provided a fairness opinion to the
LaBranche Board of Directors, and Weil, Gotshal & Manges LLP
acted as legal advisor to LaBranche for this transaction.
Conference Call with Management
Management of Cowen and LaBranche will host a conference call to
discuss the transaction on Thursday, February 17, 2011, at 8:30 am
ET. The call can be accessed by dialing 1-888-868-9083 domestic or
1-973-935-8512 international. The passcode for the call is
45502574. A replay of the call will be available beginning at 11:30
am EST Thursday, February 17, 2011 through 11:59 am EST Thursday,
February 24, 2011. To listen to the replay of this call, please
dial 1-800-642-1687 domestic or 1-706-645-9291 international and
enter passcode 45502574. The call can also be accessed through live
audio webcast or by delayed replay on the Company's website at
www.cowen.com.
About Cowen Group, Inc.
Cowen Group, Inc. is a leading diversified financial services
firm providing alternative investment management, investment
banking, research, and sales and trading services through its
business units, Ramius and Cowen and Company. Its alternative
investment management products include hedge funds, fund of funds,
real estate funds, healthcare royalty funds, cash management and
commodity trading funds, offered primarily under the Ramius name.
Cowen and Company offers industry focused investment banking for
growth-oriented companies, domain knowledge-driven research and a
sales and trading platform for institutional investors. Founded in
1918, the firm is headquartered in New York and has offices located
in major financial centers around the world.
About LaBranche & Co Inc.
The Company is the parent of LaBranche Structured Holdings,
Inc., whose subsidiaries are market-makers in options,
exchange-traded funds and futures on various exchanges domestically
and internationally.
Important Information For Investors And Stockholders
This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of
any vote or approval. In connection with the proposed transaction,
Cowen Group, Inc. (“Cowen”) and LaBranche & Co Inc.
(“LaBranche”) will file relevant materials with the SEC, including
a registration statement on Form S-4 that will include a joint
proxy statement of Cowen and LaBranche and that also constitutes a
prospectus of Cowen. Cowen and LaBranche will each mail the final
joint proxy statement/prospectus to its respective stockholders.
Investors and security holders are urged to read these documents
(if and when they become available) and any other relevant
documents filed with the SEC, as well as any amendments or
supplements to those documents, because they will contain important
information about Cowen, LaBranche and the proposed transaction.
Investors and security holders may obtain these documents (and any
other documents filed by Cowen or LaBranche with the SEC) free of
charge at the SEC’s website at www.sec.gov. In addition, the
documents filed with the SEC by Cowen may be obtained free of
charge by directing such request to: Investor Relations, 599
Lexington Avenue, New York, NY 10022 or from Cowen’s Investor
Relations page on its corporate website at www.cowen.com and the
documents filed with the SEC by LaBranche be obtained free of
charge by directing such request to: Investor Relations, 33
Whitehall Street, New York, NY 10004 or from LaBranche’s Investor
Relations page on its corporate website at www.labranche.com.
The directors, executive officers, and certain other members of
management and employees of each of Cowen and LaBranche may be
deemed to be participants in the solicitation of proxies in favor
of the proposed transactions from the stockholders of Cowen and
from the stockholders of LaBranche, respectively. Information about
the executive officers and directors of Cowen is set forth in the
proxy statement for Cowen’s 2010 Annual Meeting of Stockholders,
which was filed with the SEC on April 30, 2010 and information
about the executive officers and directors of LaBranche is set
forth in the proxy statement for LaBranche’s 2010 Annual Meeting of
Stockholders, which was filed with the SEC on April 8, 2010.
Cautionary Notice Regarding Forward-Looking
Statements
This communication may contain forward-looking statements
including statements relating to the market opportunity and future
business prospects of Cowen and LaBranche. Such statements are
subject to certain risks and uncertainties that could cause actual
results to differ materially from those expressed or implied in the
forward-looking statements. Consequently, all forward-looking
statements made during this communication are qualified by those
risks, uncertainties and other factors.
These factors include, but are not limited to, (1) the
occurrence of any event, change or other circumstances that could
give rise to the termination of the Agreement and Plan of Merger
among Cowen, LaBranche and Louisiana Merger Sub, Inc. (the “Merger
Agreement”); (2) the outcome of any legal proceedings that may be
instituted against Cowen, LaBranche or others following
announcement of the Merger Agreement and transactions contemplated
therein; (3) the inability to complete the transactions
contemplated by the Merger Agreement due to the failure to obtain
the required stockholder approvals, (4) the inability to obtain
necessary regulatory approvals required to complete the
transactions contemplated by the Merger Agreement; (5) the risk
that the proposed transactions disrupt current plans and operations
and the potential difficulties in employee retention as a result of
the announcement and consummation of such transactions; (6) the
ability to recognize the anticipated benefits of the combination of
Cowen and LaBranche, including potential cost savings; and (7) the
possibility that Cowen or LaBranche may be adversely affected by
other economic, business, and/or competitive factors.
Actual results may differ materially and reported results should
not be considered an indication of future performance. Please
reference the SEC filings of Cowen and LaBranche, which are
available on their respective web sites, for detailed descriptions
of factors that could cause actual results to differ materially
from those expressed or implied in such forward-looking
statements.
Certain statements in this communication relate to future
results that are forward-looking statements as defined in the
Private Securities Litigation Reform Act of 1995. Except for the
ongoing obligations of Cowen and LaBranche to disclose material
information under the federal securities laws, neither Cowen nor
LaBranche undertakes any obligation to release any revisions to any
forward-looking statements, to report events or to report the
occurrence of unanticipated events unless required by law.
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