November 28, 2005
Refco breakup continues as Man sheds London business
by Elliott Aykroyd
Before its purchase of Refco assets had even been fully finalised, Man
Group last week brokered a management buyout of Refcoâs London
businesses to be backed by New York-based asset management firm
Marathon and headed up by former Refco Europe MD Mark Slade.
According to a statement released by Marathon, the Refco assets to be
purchased comprised its London futures, FX and financial brokerage
operations including sales, trading, administrative, IT and exchange
clearing businesses. Also included was Refcoâs large share of repo
business cleared on LCH Clearnet.
It remained unclear at press time whether or not the deal was to
include subsidiaries, Refco Trading Services (Refco TS) or EasyScreen,
acquired by the firm in March 2003 and March 2005 respectively
(see FO Week Vol 8 No 10 and and Vol 10 No 11).
The status of trading arcade Refco TS â formerly Macfutures â was
unknown. It had been reported that the firm was part of Manâs
acquisition, but managing director Ollie Jones refused to comment on
the firmâs ownership.
Market sources had suggested that Man was looking to divest itself of
Refco TS, with one saying that its London operation was to be sold
and the US business sold or wound down separately.
Marathon said that the Refco assets being acquired employed more
than 300 people in several European countries with approximately
2,000 customer accounts. The sum paid was not disclosed, but
Marathon did say that it had also agreed to take on some liabilities.
It remained unclear also whether or not these were to include potential
legal payments to ISV Trading Technologies should the latter win its
patent court case against Refco.
Slade, who was set to become CEO of the newly established entity,
said, âWe are thrilled to finally establish clarity for Refcoâs European
business lines as there was an obvious overlap with Man Financialâs
London based business. Marathon is the ideal managing partner for
our business given its keen interest and understanding of our business.â
The new entity being formed to acquire the former Refco European
business was to be renamed in the coming days.
Marathon was part of a prior bidding group that lost out to Man
Financial in the Refco auction which took place on 10 November.
According to Marathonâs statement, shortly thereafter the firm
approached Man to purchase the European Refco assets that
Man had little interest in retaining.
A Man statement said that it had decided to sell the businesses because
of âthe high level of client overlap with its own London operation.â
Rebuilding
Bruce Richards, president of Marathon, said, âWe are very excited to
have purchased Refcoâs European assets and business operations,
which we believe hold extraordinary value creation potential. The
unmatched customer, product and market knowledge of Refcoâs
employees, coupled with Refcoâs extensive systems and infrastructure
network, make these businesses one of the premiere European
platforms for futures commission trading and clearing services.â
Richards went on to state, âGoing forward, we are committed to
implementing an immediate recapitalisation plan aimed at rebuilding our
customer base, retaining our talented employees and restoring the trust
and respect of all our key partners, including the regulators and
exchanges in the many European markets in which Refco trades.â
In a joint statement, Slade and Richards outlined the immediate plans
for the new business: âOne of our first priorities will be to implement
new financial, compliance and legal controls across our businesses that
reflect current best practices in each of these areas. We also plan to
make a substantial investment in new technology and infrastructure that
will allow the company to maintain a leadership position in exchange
and non-exchange traded futures and options.â
The new board of directors will include Slade, Gavin Prentice, director,
global head of metals, Julian Courtney, director of compliance, and
Mark Hanney, director of finance. Other members were to include
Bruce Richards, who was to serve as chairman of the board, Andrew
Rabinowitz, chief operating officer and chief financial officer of
Marathon, who will also serve as a board member with oversight of
financial, compliance and legal initiatives and Adam Phillips, head of
European investments.
(Copyright: FO Week)
Refco breakup continues as Man sheds London business
by Elliott Aykroyd
Before its purchase of Refco assets had even been fully finalised, Man
Group last week brokered a management buyout of Refcoâs London
businesses to be backed by New York-based asset management firm
Marathon and headed up by former Refco Europe MD Mark Slade.
According to a statement released by Marathon, the Refco assets to be
purchased comprised its London futures, FX and financial brokerage
operations including sales, trading, administrative, IT and exchange
clearing businesses. Also included was Refcoâs large share of repo
business cleared on LCH Clearnet.
It remained unclear at press time whether or not the deal was to
include subsidiaries, Refco Trading Services (Refco TS) or EasyScreen,
acquired by the firm in March 2003 and March 2005 respectively
(see FO Week Vol 8 No 10 and and Vol 10 No 11).
The status of trading arcade Refco TS â formerly Macfutures â was
unknown. It had been reported that the firm was part of Manâs
acquisition, but managing director Ollie Jones refused to comment on
the firmâs ownership.
Market sources had suggested that Man was looking to divest itself of
Refco TS, with one saying that its London operation was to be sold
and the US business sold or wound down separately.
Marathon said that the Refco assets being acquired employed more
than 300 people in several European countries with approximately
2,000 customer accounts. The sum paid was not disclosed, but
Marathon did say that it had also agreed to take on some liabilities.
It remained unclear also whether or not these were to include potential
legal payments to ISV Trading Technologies should the latter win its
patent court case against Refco.
Slade, who was set to become CEO of the newly established entity,
said, âWe are thrilled to finally establish clarity for Refcoâs European
business lines as there was an obvious overlap with Man Financialâs
London based business. Marathon is the ideal managing partner for
our business given its keen interest and understanding of our business.â
The new entity being formed to acquire the former Refco European
business was to be renamed in the coming days.
Marathon was part of a prior bidding group that lost out to Man
Financial in the Refco auction which took place on 10 November.
According to Marathonâs statement, shortly thereafter the firm
approached Man to purchase the European Refco assets that
Man had little interest in retaining.
A Man statement said that it had decided to sell the businesses because
of âthe high level of client overlap with its own London operation.â
Rebuilding
Bruce Richards, president of Marathon, said, âWe are very excited to
have purchased Refcoâs European assets and business operations,
which we believe hold extraordinary value creation potential. The
unmatched customer, product and market knowledge of Refcoâs
employees, coupled with Refcoâs extensive systems and infrastructure
network, make these businesses one of the premiere European
platforms for futures commission trading and clearing services.â
Richards went on to state, âGoing forward, we are committed to
implementing an immediate recapitalisation plan aimed at rebuilding our
customer base, retaining our talented employees and restoring the trust
and respect of all our key partners, including the regulators and
exchanges in the many European markets in which Refco trades.â
In a joint statement, Slade and Richards outlined the immediate plans
for the new business: âOne of our first priorities will be to implement
new financial, compliance and legal controls across our businesses that
reflect current best practices in each of these areas. We also plan to
make a substantial investment in new technology and infrastructure that
will allow the company to maintain a leadership position in exchange
and non-exchange traded futures and options.â
The new board of directors will include Slade, Gavin Prentice, director,
global head of metals, Julian Courtney, director of compliance, and
Mark Hanney, director of finance. Other members were to include
Bruce Richards, who was to serve as chairman of the board, Andrew
Rabinowitz, chief operating officer and chief financial officer of
Marathon, who will also serve as a board member with oversight of
financial, compliance and legal initiatives and Adam Phillips, head of
European investments.
(Copyright: FO Week)