Mizuho Exits $295 Million Evercore Stake Tied to 2008 Deal

  • 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.

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