Man Group UK Ltd, has entered into a Variable Forward Sale (VFS) Agreement with Nomura International plc over its entire remaining stake in MF Global Ltd.
The transaction is the final step in Man Group’s complete disposal of MF Global shares following its IPO in July 2007. From an accounting perspective, de-recognition of the MF Global shareholding occurs immediately.
Nomura has executed its initial hedging sales under the VFS Agreement at a sale price of USD5.95 per share. The VFS Agreement guarantees that Man Group will achieve a minimum of USD5.355 per share (90% of the Nomura’s initial hedging sales price), while retaining a capped participation in future share price appreciation over a three to four year period. The structure provides Man Group with gross initial disposal proceeds of USD112 million, which it expects to receive early next week.
Man Group’s regulatory capital surplus will increase by roughly USD90 million as a result of this transaction. MF Global will receive no proceeds from the VFS transaction.
L.D.