NEW YORK – Third Avenue Management LLC sent a letter to Edward J. Nicoll, chief executive officer of Instinet Group Incorporated and Robert Griefeld, chief executive officer and president of NASDAQ Stock Market, Inc. Thursday extending Third Avenue’s acquisition proposal for Instinet Group Incorporated’s Institutional Brokerage Business until June 16.
Ian Lapey, a portfolio manager for Third Avenue, said in a release that his company is disappointed that the company’s board of directors has not responded to the acquisition proposal for the institutional brokerage business and urged the company to seriously consider the buy-out.
“Our offer represents a premium of $100 million in cash or approximately 48 percent to the pending sale of the institutional brokerage business to Silver Lake and Instinet management,” Lapey said in a statement. “By ignoring our offer, the Company’s Board of Directors is enabling Silver Lake and Instinet management to acquire the business at what we believe to be less than tangible book value and quite possibly less than the net cash on the balance sheet.”
Lapey also said Third Avenue is dissatisfied with the continued lack of transparency concerning the details of the balance sheet of IBB, the business that Silver Lake and certain members of Instinet’s management are purchasing from Third Avenue and other Instinet shareholders.
“Specifically, while discussing the proposed transaction during the company’s April 25 conference call, management was unwilling to disclose whether they and Silver Lake were purchasing the business for a premium to book value, noting that there are ‘a lot of moving parts,'” he said.