CHICAGO -- A Mexico-based financial services company announced its intention yesterday to acquire a majority stock interest in Chicago-based Rodman & Renshaw Inc.

The joint announcement by Rodman and ABACO Casa de Bolsa followed weeks of speculation as to which acquisition bid Rodman would ultimately accept. Rodman had received eight merger or acquisition bids by the deadline it set on Sept. 15. Five days later the firm announced that five of the parties were selected for a final round of bidding.

According to the announcement, Rodman's board voted on Sunday to proceed with negotiations with the Mexican firm, which has proposed acquiring 51% of Rodman's outstanding common stock at a cash price of $10.50 per share.

Rodman's stock closed yesterday up 5/8 a t 8 3/4.

ABACO Casa de Bolsa's proposal is subject to "completion of due diligence to verify information supplied by Rodman, regulatory approvals and negotiation of satisfactory agreements," according to the announcement. The Monterrey, Mexico-based firm said it expects to complete the due diligence process by Nov. 16 and then proceed with applying for regulatory approval.

Officials at both firms did not return phone calls.

In a statement, Jorge Lankenau, chairman of ABACO Grupo Financiero, the financial services parent of broker subsidiary ABACO Casa de Bolsa, said he is "proud" to have his firm take its place "as a major player in the globalization of the financial industry."

According to the announcement, ABACO has a net worth in excess of $650 million. In addition to its brokerage subsidiary, which has a broker-dealer branch in New York City, the firm also owns a commercial bank and companies involved in leasing, factoring, foreign exchange, and insurance.

There was some speculation on the street that with ABACO as its majority owner, Rodman might be reincarnated as a minority-owned firm in terms of garnering underwriting business. But some public finance officials suggested that issuers in Illinois would require that a firm be owned by a Mexican American in order to be certified as a minority firm.

In its certification process, the state of Illinois requires that the majority of a firm be owned and controlled by a minority person who is "a citizen or lawful, permanent resident of the United States."

The announcement raised questions for Rodman's major stockholders. Last week, Josephthal, Lyon & Ross, a New York-based investment bank and brokerage firm that owns 8% of the firm's stock and that was one of the final bidders, gave Rodman until 6 p.m. Sunday to make a decision, according to Dan Pubes, Josephthal's chairman. He said his firm had been waiting for "a long period of time" for Rodman to decide on the offer that Josephthal originally submitted in July.

However, Rodman decided to initiate a due diligence process in August to review all interest in the firm. The process eventually led to the Sept. 15 deadline for bids and Josephthal's resubmittal of its proposal.

Rodman's announcement yesterday said that its board allowed Josephthal's deadline to expire.

Purjes said his firm declined to better ABACO's $10.50 a share cash offer when asked by Rodman.

"Given the history of [Rodman], I feel it is a high price," he said.

Purjes said he is disappointed with the decision by Rodman's board, adding that he felt Rodman's employees would be happier with a firm that "understands the securities business" in the United States. He said he will be watching developments at Rodman before deciding what to do with the stock.

Marshall Geller, a California investor who is Rodman's largest individual shareholder with about 9% of stock, said while he is "encouraged" by the Mexican firm's bid, he has many questions about what ABACO plans to do with Rodman.

Geller has been critical of the firm's management, and of the recent dropping of Rodman co-manager of an Illinois general obligation bond issue after state officials learned of pending sexual harassment complaints.

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