Cowen Group Inc said it agreed to merge with privately held asset manager Ramius LLC, three months after its rival Rodman & Renshaw Capital Group Inc terminated an offer to buy the boutique investment bank.
Cowen shares shot up 45 percent to $7 in early trade Thursday on Nasdaq.
Under the deal, Ramius and a third party investor in Ramius will get 37.54 million and 2.71 million, respectively, of Cowen common shares. This represents 71.24 percent of the new company.
Based on Cowen's Wednesday closing price of $4.84, the deal is valued at about $194.8 million.
Last December, Rodman had offered to buy Cowen Group for $7 a share, or nearly $100 million.
The new company will retain the Cowen Group Inc name and its shares are expected to continue to trade on Nasdaq. Ramius will continue as its investment advisory unit.
Ramius is a global alternative investment firm with about $7.7 billion in assets under management.
Ramius' founder Peter Cohen will become the chief executive of the combined company and Cowen's CEO Greg Malcolm will continue to remain in that capacity for the broker-dealer unit.
(Reporting by Supantha Mukherjee in Bangalore; Editing by Ratul Ray Chaudhuri)