Bond-Trading Firm Gleacher Said to Seek Buyer
Gleacher & Co. (GLCH), the New York-based bond-trading firm formerly known as First Albany Cos., said it’s evaluating “a range of available options for its future” including asset sales or a merger.
The firm “has retained a financial advisor to assist it in exploring and evaluating strategic alternatives,” it said in a statement today. No decisions on Gleacher’s future have yet been made, and the options under discussion include “partnering with one or more equity investors” and “a business combination,” the company said.
Gleacher’s board has hired Credit Suisse Group AG (CSGN) to solicit offers amid pressure for a sale from its top investor, private-equity firm MatlinPatterson Global Advisers LLC, two people with knowledge of the matter said yesterday. The firm had a market value of $94 million at the close of trading in New York yesterday after its shares rose 1.3 percent to 76 cents.
Representatives for MatlinPatterson and Credit Suisse declined to comment yesterday.
Gleacher’s shares had lost more than half their value this year through Aug. 28 as Chief Executive Officer Thomas Hughes’s plan to restructure the brokerage led to employee defections and writedowns on the value of goodwill. Hughes is selling assets to reduce the firm’s leverage, replacing executives and shuttering units that failed to meet expectations after two consecutive annual losses.
Gleacher this year replaced top executives including Joseph Mannello, who ran corporate credit, and Robert Fine, who oversaw mortgage and asset-backed securities. The May departure of Fine and his head of trading, Robert Tirschwell, led to the departure of as many as half of the unit’s 70 employees.
The firm traces its roots to First Albany, a regional brokerage founded in 1953 in New York’s capital city. MatlinPatterson received a majority stake in the company, which changed its name to Broadpoint Securities Group Inc. after a $50 million investment in 2007 to restore the broker’s capital following losses.
MatlinPatterson invested through its second fund, which it finished raising in 2004. Private equity firms typically seek to return capital to investors within a decade. MatlinPatterson’s stake currently represents about 28 percent of the stock, according to data compiled by Bloomberg.
In 2009, Broadpoint changed its name after acquiring the advisory boutique run by Eric Gleacher, a mergers and acquisitions banker who founded Lehman Brothers Holdings Inc.’s M&A department in 1978. Gleacher controls about 12 percent of the firm’s shares, Bloomberg data show.
Gleacher had 453 employees as of Dec. 31, according to a regulatory filing. This month, the board created a retention plan for four senior executives including Hughes, updating arrangements such as provisions for severance in the event of a sale of the company.
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