The hedge fund manager’s biggest shareholder may head a group of bidders in a 140 pence a share offer for Man Group, the Daily Mail reported today, without saying where it got the information. The stock climbed as much as 6.7 percent to 96 pence, the highest since May 3 in intraday trading. The shares closed up 3.8 percent at 93.4 pence in London, valuing the company at about 1.7 billion pounds ($2.7 billion).
David Waller, a spokesman for London-based Man Group, and Emma Phillips, a spokeswoman for New York-based BlackRock, declined to comment on the report.
Man Group’s assets under management fell to $52.7 billion at the end of June from $71 billion a year earlier as its biggest hedge fund, the $19.5 billion AHL computerized trading system, underperformed rivals and the European sovereign debt crisis hurt sales. The firm agreed to buy hedge fund of funds manager FRM Holdings Ltd. in May, adding $8 billion in assets.
An acquisition of Man Group by BlackRock or another company is “unlikely,” Peter Lenardos, an RBS Capital Markets analyst, wrote in a note to clients today. BlackRock’s Man Group shares aren’t a “strategic stake” because its underling investment funds hold the stock, he wrote.
“We do not see the logic of acquiring a company whose funds, in our opinion, are underperforming key benchmarks and are experiencing net outflows,” said Lenardos, who has a sector-perform rating on Man Group. “Further, we continue to believe that AHL is priced above competitors despite having weaker performance.”
The stock has fallen 26 percent this year and is trading at about 0.73 times its book value, according to data compiled by Bloomberg. The firm dropped out of the FTSE 100 Index this year.
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