Shareholder Sues GLG, Challenges Man Deal

May 25 2010 | 12:04pm ET

A GLG Partners shareholder has sued the hedge fund, arguing that its deal to be acquired by the Man Group undervalues its shares.

The deal would create the world’s largest hedge fund manager, with some $63 billion in assets, at the expense of GLG’s investors, Ron Duva alleges. “The timing of the proposed transaction has been engineered to take advantage of a recent decline in the trading price” of GLG shares, the lawsuit, filed in Delaware Chancery Court, claims.

Man has agreed to pay $4.50 per share for GLG, a 55% premium to its stock price when the deal was announced on May 17. It’s still more than GLG shares are trading for today, about $4.22, and only slightly below its 52-week high of $4.61. But that is still less than half what GLG shares were valued when the firm went public on the New York Stock Exchange via a reverse-merger.

Duva’s lawsuit also alleges that the Man deal “contains provisions designed to entrench management and deter alternative offers,” specifically challenging both the $48 million breakup fee that GLG would have to pay if it backs out of the deal, and the provision paying GLG executives in Man shares rather than in cash, as other GLG shareholders will be paid.

GLG called the lawsuit “entirely without merit.”

Man is paying $1.6 billion for GLG, which manages $23.7 billion.


In Depth

Whisky Business: The Ultimate Liquid Alternative Investment

Sep 15 2014 | 7:02am ET

David Robertson knows his single-malt whisky—he was the Master Distiller at the...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

The Cult of Loss Aversion: A Call to Rethink Risk in Global Macro Investing

Sep 4 2014 | 5:45am ET

In the wake of a traumatic loss, whether it is financial or personal, it is just...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

July/August 2014 Cover

In search of the ‘new normal’ at the Fed

The Federal Reserve keeps baby-stepping toward a “normalization” of monetary policy. But just what is normal?

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.