Man Group, the hedge fund manager, will sell its remaining 18.6 per cent stake in MF Global, the derivatives brokerage it spun off in 2007Man Group said late on Thursday it had reached a variable forward sale agreement with Nomura International that guaranteed it an initial payment of $112m but would also allow it to profit from an any appreciation in MF Globalâ??s share price over the next three to four years.
MF Globalâ??s former parent is selling 22.25m shares in the company, which is the worldâ??s biggest broker of exchange-listed futures and options. The agreement gives Man Group a minimum of $5.355 per share â?? below MF Globalâ??s closing price of $6.67 in New York trading on Thursday. Man Groupâ??s shares opened 0.5 per cent higher at 264½p in London on Friday after confirmation of the sale was announced in a stock exchange statement.
Man Group had said in February that it planned to dispose of its remaining stake in MF Global. Its shares have risen in recent months on anticipation of the deal.
MF Globalâ??s shares have performed disappointingly in its two years of independence. The stock price plunged last year after a wheat trader at the brokerâ??s Memphis office racked up $141m of losses in unauthorised trading in the largest trading scandal ever to hit agricultural commodity markets.
This year the company has struggled as the economic crisis has led financial institutions to cut derivatives trading desks, resulting in slumping volumes at brokerages and exchanges.
However, the share price has more than tripled since reaching a low of $1.72 in November 2008. Today shares in MF Global were up by 2.4 per cent, trading at $6.83 in N.Y.
