Brokerage
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“MF Global is the leading broker of
exchange-listed futures and options
in the world.”
Separation of the Business
The Group Board, after a thorough review in conjunction with their financial
advisers, has concluded that Man Financial and Man Investments would
be best positioned to maximise future returns and growth opportunities
by pursuing focused independent strategies and having appropriate individual
capital structures. Therefore, the Board of Man Group intends to separate
its Brokerage business, Man Financial, subject inter alia to shareholder
approval. The Board also believes that significant value will be created
for Man Group shareholders from a separation.
We believe this offering and the separation from Man Group will emphasise Man Financial’s commitment to specialty brokerage and enhance its position as the largest specialty broker in our markets. We also believe that having a public trading market for its shares will enable it to offer more attractive consideration to potential acquisition targets and to compensate its employees in a way that more closely aligns their interests with the business.
Man Financial, our Brokerage business, will be renamed ‘MF Global’ with effect from the separation. Kevin Davis, currently Managing Director of Man Financial will become CEO of MF Global, Chris Smith will become COO and Deputy CEO and Amy Butte will be CFO. The non-executive Chairman will be Alison Carnwath.
The proposed separation will be effected by an initial public offering on the New York Stock Exchange of a majority interest in MF Global and is intended to take place in the third calendar quarter of 2007, subject to market conditions remaining favourable.
Overview of the Business
MF Global is the leading broker of exchange-listed futures and options
in the world. It provides execution and clearing services for exchange-traded
and over-the-counter, or OTC, derivative products, as well as for non-derivative
foreign exchange products and securities in the cash market. MF Global
provides its clients with access to many of the largest and fastest
growing financial markets throughout the world.
MF Global’s business is based on a diversified yet fully integrated model that allows it to offer a variety of derivative and cash products across a broad range of trading markets through multiple distribution channels. This diversified yet integrated model positions MF Global as a centralised provider of brokerage services across multiple products, trading markets and regions. We believe there is a strong market trend toward diversified trading activities, in which clients seek access to multiple trading alternatives to implement their trading strategies. We believe MF Global is well positioned to profit from this trend because it provides its clients with a central point of entry into a wide range of diverse trading alternatives and enable them to bridge the gaps between complementary products, trading markets and regions. We believe that MF Global’s ability to provide access to a wide range of trading alternatives, as well as clearing services, distinguishes it from most of its principal competitors, provides diversity and stability to its business and enables it to adapt quickly to changing market conditions and client needs (see Figure 27).
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