Thursday, Ramius LLC and Cowen Group, Inc. (COWN) announced a transaction agreement to form a diversified financial services company, and has been approved by the Board of Cowen. Under the terms of the agreement, Ramius and an affiliate of a third party investor in Ramius will receive 37.54 million and 2.71 million shares, respectively, of Cowen common stock, representing 71.24% of the new company on a fully diluted basis. Cowen shareholders will own approximately 28.76% of the new company. The transaction is expected to close in the fourth quarter of 2009.
The company revealed that the exchange ratio was determined based on the relative book values of Ramius and Cowen as of December 31, 2008. As of March 31, 2009, the new company would have had a combined book value of over $450 million, including investible assets and cash of approximately $380 million, and minimal debt.
The new company will retain the Cowen Group, Inc. name and its shares are expected to continue to trade on NASDAQ under the ticker symbol "COWN". Ramius will continue as the investment advisory subsidiary. As part of the transaction, the new company will also purchase from the affiliate of the third party investor the fifty percent interest in Ramius Fund of Funds not currently owned by Ramius.
Ramius is a privately-owned global alternative investment firm with approximately $7.7 billion of assets under management invested across a range of alternative investment vehicles.
Peter Cohen, currently Founder and Managing Member of Ramius, will serve as Chairman and Chief Executive Officer of the combined company and Greg Malcolm, currently CEO and President of Cowen, will continue to serve in those capacities for the broker-dealer subsidiary. Morgan Stark, Ramius Managing Member, will be Chief Executive Officer of Ramius' internal asset management businesses and Thomas Strauss, Ramius Managing Member, will continue to be Chief Executive Officer of the Ramius Fund of Funds Group.
COWN is currently trading at $6.41, up $1.57 or 32.44%, on a volume of 1.53 million shares on the Nasdaq.
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