Giant hedge fund shop GLG Partners today says it plans to access the public markets through a reverse merger with Freedom Acquisition Holdings, a blank check company. The transaction values GLG at approximately $3.4 billion based on Freedom’s closing price of $11.68 on June 22. The move has been unanimously approved by the board of Freedom.
Under the terms of the agreement, the owners of GLG will receive from Freedom $1 billion in cash and 230 million shares of the firm’s common stock on a fully diluted basis.
The combined company will be named GLG Partners and shares of the new entity are expected to trade on the New York Stock Exchange under the ticker symbol “GLG” sometime in the fourth quarter. GLG says it will also explore “the merits of a dual listing in Europe.”
Based on Freedom’s closing price last on Friday, Freedom’s shareholders will own approximately 28% and current GLG equity holders will own 72% of the combined company’s shares.
“This strategic transaction is an important step in building GLG’s global business, affording us the opportunity to increase brand awareness and expand in major targeted markets, including the U.S., Middle East and Asia,” said Noam Gottesman, founder.
“Accessing the public markets through Freedom allows GLG to take full advantage of our highly scalable infrastructure as well as our recent growth and track record of success to expand our client relationships and distribution capabilities.”
Gottesman will become chairman of the board and co-CEO of the combined company and Emmanuel Roman, currently a managing director and co-CEO of GLG, will also become co-CEO of the combined company.
In other GLG news, the firm has confirmed that Istithmar and Sal Oppenheim have each entered into agreements to acquire 3% ownership positions in GLG and to invest into various GLG managed funds. These transactions are expected to close in July 2007.
Both Istithmar and Sal Oppenheim purchased their ownership interests from a former principal of GLG. “In addition to their ownership interests, Istithmar and Sal Oppenheim will help to support the further development and expansion of our business in the Middle East and Europe,” said Gottesman.
Istithmar is an investment vehicle of the Government of Dubai in the United Arab Emirates and was established in 2003. Cologne, Germany-based Sal Oppenheim is a private bank with approximately €138 billion (US$185.8 billion) in assets under management.