Mizuho Exits $295 Million Evercore Stake Tied to 2008 Dealby
Japanese bank to exercise warrants for 5.45 million shares
Evercore shares have quadrupled since 2008 Mizuho transaction
Mizuho Bank Ltd., the Japanese firm that invested in Evercore Partners Inc. during the financial crisis, is selling a stake in the U.S. investment bank while extending an agreement to jointly pursue merger-advisory work for three years.
Mizuho will divest 3.1 million shares in a public offering after exercising warrants that it obtained in 2008, according to a statement Monday from New York-based Evercore. The contract allows Mizuho to get 5.45 million shares for $22 apiece, and Evercore will buy back the remaining 2.35 million shares from the Japanese company at the offering price. At Friday’s closing price of $54, Mizuho will be selling about $295 million of stock.
Mizuho will also surrender the $120 million of 5.2 percent senior notes due in 2020 it acquired in 2008, and that will be replaced by a new loan. Evercore, founded by Roger Altman, sought capital at the time to boost its investment-management business. Evercore’s relationship with Mizuho extends back to a 2006 partnership to win merger deals between Japanese and U.S. companies.
“The alliance enables Evercore and Mizuho Securities to continue to capitalize on the long-term trend of outbound mergers and acquisitions from Japan, driven by Japanese corporations’ need for growth outside of the slow-growing domestic Japanese market,” Joel Jeffrey, an analyst at Keefe Bruyette & Woods, said in a note to clients.
Evercore shares closed at $12.84 on Aug. 20, 2008, the day before the Mizuho investment was announced. The New York-based company rallied 4.8 percent Monday, the most since December, to $56.59.