CHICAGO -- Rodman & Renshaw Inc. and ABACO Casa de Bolsa made their engagement official yesterday.
The Chicago-based Rodman and Mexico-based ABACO said they have signed a "definitive agreement" for ABACO to acquire about 51% of Rodman's outstanding common stock at $10.50 a share in cash.
Under the agreement, ABACO will begin a tender offer within five business days for the stock, according to a press release from Rodman. The consummation of the tender offer is subject to various conditions, including the ability of ABACO to obtain a minimum of 51% of Rodman's shares. If less than that amount is tendered, Rodman will sell ABACO up to 220,000 shares at the $10.50 a share price.
Rodman shares closed unchanged yesterday at 8 3/4.
The deal is subject to other conditions, including the absence of any material change in Rodman's business and obtaining necessary U.S. and Mexican regulatory approvals.
Last week, Rodman lost the last public finance official in its Chicago office, leaving just one investment banker in its Los Angeles office. Rodman officials have said they would begin rebuilding the Chicago department once the deal with ABACO is completed. The officials also said that ABACO is committed to having Rodman stay in public finance.
Yesterday, Rodman said that Kurt Karmin will continue as chairman but he has stepped down as chief executive officer to be replaced by Norman Mains, Rodman's president.
ABACO, a broker subsidiary of ABACO Grupo Financiero, a financial services company based in Monterrey, Mexico, announced Nov. 1 its intention to acquire a majority stock interest in publicly traded Rodman. Since then, ABACO has been completing a due diligence review of Rodman.
ABACO was one of five merger or acquisition finalists Rodman's board of directors was considering earlier this fall after announcing it would entertain proposals.
In the press release, Jorge Lankenau, chairman of ABACO Grupo Financiero, said the transaction is "the starting point in our search to find both companies' place in the globalization of the financial industry."
ABACO Grupo Financiero has a new worth in excess of $650 million.