Highbury Financial (stock symbol: [t]HBRF[/t]) has agreed to merge with Affiliated Managers Group, Inc. The shares closed the day at $5.30, up $1.30 for the day. The warrants closed the day at $.37, up $.34 for the day.
Highbury Financial Inc. Announces Definitive Merger Agreement With Affiliated Managers Group, Inc.
Press Release
Source: Highbury Financial Inc.
On 8:13 am EST, Monday December 14, 2009
DENVER, CO--(Marketwire - 12/14/09) - Highbury Financial Inc. ("Highbury") (OTC.BB:HBRF - News) (OTC.BB:HBRFW - News) (OTC.BB:HBRFU - News) and Affiliated Managers Group, Inc. ("AMG") (NYSE:AMG - News) have entered into a definitive merger agreement whereby AMG will acquire Highbury. Under the terms of the agreement, AMG would issue an aggregate of up to 1,748,879 shares of AMG common stock in exchange for all of the outstanding equity of Highbury. In addition, shortly before the closing, which is expected to occur in the second quarter of 2010, Highbury expects to pay a special cash dividend to its common and preferred stockholders in an aggregate amount equal to its working capital in excess of $5 million. Assuming an April 30, 2010 closing, this special dividend is estimated to be in the range of $0.34 to $1.09 per Highbury share (calculated including the shares of Highbury's Series B Convertible Preferred Stock on an as converted basis) depending on the number of outstanding warrants of Highbury exercised prior to closing. Based on an AMG stock price of $66.90 (which was determined using the average closing sales price of AMG shares over the 25 trading days ending December 11, 2009) the transaction values the Highbury common stock at $6.10 to $6.33 per share depending on the number of outstanding warrants of Highbury exercised prior to closing, although the actual value will depend on the AMG stock price at the time of the closing.
Pursuant to the agreement, the number of AMG shares to be issued in the merger may be reduced if the aggregate revenue run rate for Aston Asset Management LLC, Highbury's wholly-owned principal operating subsidiary, at the end of the month prior to closing is less than 90% of the aggregate revenue run rate calculated as of November 30, 2009, excluding the impact of market movement between those dates.
Richard S. Foote, Highbury's President and Chief Executive Officer, stated, "We evaluated a number of strategic alternatives to maximize the value of Highbury for our stockholders, and we believe the transaction with AMG best provides Highbury stockholders with current value and the ability to continue to participate in the asset management industry through the ownership of AMG stock."
The transaction has been approved by the boards of directors of Highbury and AMG, following, in the case of Highbury, the recommendation of the independent special committee of its board of directors, and is subject to the approval of both Highbury stockholders and Aston mutual fund shareholders, as well as other customary closing conditions and regulatory approvals. Stockholders holding approximately 30% of Highbury's outstanding common stock, assuming conversion of outstanding shares of Highbury's Series B Convertible Preferred Stock, have entered into voting agreements with AMG to vote in favor of the merger. The transaction is intended to be tax-free with respect to the AMG common stock to be received in the transaction by Highbury stockholders.
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