Barbarian in China

29 March 2017 By Tom Buerkle

Peter Cohen’s banking boutique is selling a stake to energy group CEFC China and raising $275 mln. Cowen needs capital to keep growing and its partner’s modest securities business could use expertise. Unlike some recent China-U.S. finance deals, the logic here just might add up.

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Cowen Group said on March 29 it had agreed to sell a 19.9 percent stake to China Energy Company for $100 million. CEFC China, as the buyer is known, will have the right to appoint three directors to Cowen’s board, raising the number of seats to 11.

The investment banking boutique will sell newly issued shares to CEFC China at $18.00 a share, a premium of 29.5 percent to the previous day’s closing price. The proceeds will repay Cowen’s $63 million in 8.25 percent bonds due in 2021 and finance growth opportunities, the company said.

The Chinese company will also provide Cowen with a six-year unsecured loan of $175 million.

Cowen’s share price rose 9 percent on the day to $15.15.

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