Tatton Asset Management Regulatory News (TAM)

6 Sep 2007 07:01

Titanium Asset Management Corp06 September 2007 Titanium Asset Management Corp.6 September 2007 Not for release, publication or distribution in whole or in part in or into theUnited States, Canada, Australia, Republic of South Africa or Japan TITANIUM ASSET MANAGEMENT CORP. PROPOSED ACQUISITIONS OF WOOD ASSET MANAGEMENT INC, SOVEREIGN HOLDINGS, LLC ANDCERTAIN CLIENT MANDATES OF SIESTA KEY CAPITAL, LLC NOTICE OF SPECIAL MEETING HIGHLIGHTS • Titanium announces its first acquisitions since admission to AIM in June 2007 • Stockholders holding a majority of the Company's common shares have alreadyirrevocably undertaken to vote in favour of approving the acquisitions • Titanium is to acquire Wood Asset Management Inc, Sovereign Holdings, LLC andcertain client mandates of Siesta Key Capital, LLC • Following completion of the acquisitions, the Company will have approximatelyU.S.$3.33 billion of assets under management For further information: Titanium Asset Management Corp.John Sauickie, Chief Executive Officer +1 941 524 5672Nigel Wightman, Executive Director + 44 7789 277849 Seymour Pierce LtdJonathan Wright + 44 20 7107 8000 Penrose Financial Gay Collins +44 7798 626 282Kay Larsen +44 7747 631 614 Titanium Asset Management Corp. ("Titanium" or the "Company") (AIM: TAM) ispleased to announce that it has entered into agreements to acquire: • the entire issued and outstanding capital stock of Wood Asset Management Inc("Wood"); • the entire issued and outstanding capital stock of Sovereign Holdings, LLC("Sovereign"); and • certain client mandates from Siesta Key Capital LLC ("SKC") (collectively, the "Acquisition"). In aggregate, following completion of the Acquisition, the Company will haveapproximately U.S.$3.33 billion of assets under management ("AUM"). The Acquisition is expected to be completed on 1 October 2007 and constitutes areverse takeover under the AIM Rules. The Acquisition is therefore contingentupon, among other things, approval by a majority of the holders of common stock in Titanium ("Stockholders") at a Special Meeting. Stockholders holding a majority of Titanium's common shares ("Common Shares")have already irrevocably undertaken to vote in favor of the resolution to beproposed at the Special Meeting to approve the Acquisition thus ensuring its approval by Stockholders. The Company is today despatching to Stockholders a re-admission document inrespect of Titanium (as enlarged by the Acquisition) that contains allinformation required by the AIM rules and contains a notice convening theSpecial Meeting.. Information on Titanium Titanium was formed and organised as a corporation under the laws of the Stateof Delaware to serve as a vehicle for the acquisition of one or more operatingcompanies or businesses, assets or divisions of companies, engaged in the assetmanagement industry. Titanium currently has no business operations. Titanium's issued Common Shares and Warrants were admitted to trading on AIM on21 June 2007 and, at that time, Titanium raised approximately U.S.$110,000,000net of expenses. Effect of the Acquisition The Acquisition, on completion, will constitute a Business Combination (asdefined in Titanium's admission document dated 18 June 2007 ("AdmissionDocument")) and, accordingly, on completion: • the Directors of Titanium will become eligible to be paid compensation; • certain payments due from the Company to SKC for the provision of administrative services will cease; and • certain deferred fees will become payable. However, the Acquisition will not constitute a Qualified Business Combination(as defined in the Admission Document). Titanium is, however, in discussionswith several potential target businesses, any one of which, if negotiations aresuccessfully concluded, would amount to a Qualified Business Combination. Following completion of Acquisition, the Company will no longer be an investingcompany for the purposes of the AIM Rules. After such time, Titanium willcontinue as a normal operating company. Information on Wood Wood is a Registered Investment Adviser with the SEC under the InvestmentAdvisers Act of 1940 and is located in Sarasota, Florida. It was founded by GaryWood in 1994. Wood manages U.S.$1.49 billion of equity, balanced, fixed incomeand convertible investments for a number of retail and institutional clientsboth directly and through WRAP programs. Its principal activity is themanagement of mid and large cap U.S. equities using a relative value style basedon its own fundamental research. Wood's clients include high net-worthindividuals, foundations, pension plans and brokerage firms. In the year ended 31 December 2006, Wood had total revenues of U.S.$6,252,000and net income of U.S.$950,000. As at 31 December 2006, Wood had total assetsof U.S.$932,000. Information on Sovereign Sovereign, trading as Sovereign Advisers, is a Registered Investment Adviserwith the SEC under the Investment Advisers Act of 1940 and is located inCharlotte, North Carolina. Sovereign manages U.S.$1.74 billion of fixed incomeinvestments for a number of retail and institutional clients directly andthrough WRAP programmes. Sovereign's clients include high net-worth individuals,municipalities, companies, brokerage firms and charities. Sovereign offers a range of customized fixed income solutions, but has severalstandard products including intermediate taxable fixed income, municipaltax-exempt fixed income and enhanced cash. It uses both third party research andits own quantitive analysis in its investment process. Sovereign was founded by InterState Johnson Lane ("ILJ"), a Charlotte-basedbroker-dealer and member NYSE firm. ILJ registered its investment advisory unit,Sovereign Advisers, with the SEC in 1987. In 1997 IJL sold a controllinginterest in Sovereign to Jeff Hines, its current President. In the year ended 31 December 2006, Sovereign had total revenues ofU.S.$3,321,000 and net income of U.S.$827,000. As at 31 December 2006,Sovereign had total assets of U.S.$1,893,000. Information on SKC SKC is a Registered Investment Adviser with the SEC under the InvestmentAdvisers Act of 1940 and is located in Sarasota, Florida. It has assets undermanagement of approximately U.S.$150 million and manages equity portfolios forpension plans, charities, corporations and high net worth individuals. Mr. JohnSauickie founded SKC in 2004 and serves as its Managing Partner. It isanticipated that approximately U.S.$100 million AUM will be transferred pursuantto the SKC Transfer Agreement. Existing Directors The existing directors of Titanium are all to remain on the board following completion: Senior management In addition to the Existing Directors, details of the other key seniormanagement of Titanium (following completion of the Acquisition), being thesenior management of Wood and Sovereign, are set out below: Wood Gary Wood - President and Chief Investment Officer (68). Prior to forming Woodin 1994, he founded Schaenen Wood & Associates, Inc. (SWA) and was its Presidentand Chief Investment Officer. He was President of Winrich Schaenen & Wood, thepredecessor firm to SWA and was principal of Estabrook Capital Management, Inc.His other previous positions were with Brown Brothers Harriman & Co., MorganStanley and Goldman Sachs & Co. He graduated from San Jose State University witha B.S. in Engineering and has an MBA from Harvard Business School. He is amember of the State of Florida Retirement System Investment Advisory Council. Harald Hvideberg, CFA, - Executive Vice President, (39). Prior to joining Woodin 2004, he was a portfolio manager and analyst with William R. Hough & Co. from1997 to 2004. He holds an MBA from the University of Florida, and a BA inEconomics and a BS in Finance from the University of South Florida. He is theDirector of Research, heading the firm's research and analysis activities. Patricia Woodruff, CFA - Managing Director (56). Prior to joining Wood in 1994,she was a Vice President and Senior Investment Officer for the Bank of Boston -Florida from 1990 - 1994. For the prior 18 years she was Vice President andRegional Investment Manager for NationsBank and Florida National Bank. She holdsa BA in Economics from Stonehill College, North Easton, Massachusetts. Robert Stovall, CFA - Managing Director (81). Prior to joining Wood in 2003 heheld positions at E.F. Hutton, Reynolds and Dean Witter, Stovall Twenty FirstAdvisers and Prudential Financial. He has been a regular commentator on both CNNand CNBC and a regular columnist for both Forbes and Financial World. Hegraduated from Wharton, University of Pennsylvania with a BS in Economics andhas an MBA from New York University. Since 1985 he has been a Professor ofFinance at NYU's Stern Graduate School of Business. Bert Carter - Executive Vice President (70). Prior to joining Wood in 1997 heheld positions at Schaenen Wood & Associates, Cramer Rosenthal McGlynn andIrving Trust Investment Management. He holds a BA from Cornell University and anMBA from Columbia Business School. Mark Troy - Executive Vice President (47). Prior to joining Wood in 2003, Markwas an independent consultant and had previously held positions at NicholasApplegate Capital Management and Smith Barney Consulting Group. He is a graduateof East Carolina University and attended the University of Delaware's GraduateSchool of Business. Thomas Dillon III, CFA - Executive Vice President (63). Prior to joining Wood in2005, He was with the Stanford Group Company and the Stanford WashingtonResearch Group and he has also held positions at Donaldson Lufkin and Jenrette,Salomon Brothers and UBS. He is a graduate of the University of North Carolina,Chapel Hill and has an MBA from Emory University. Sovereign Jeff Hines, CFA - President (53). Prior to joining Sovereign in 1994 he heldvarious executive positions at institutional fund management firms. He is acharter member of the CFA institute and graduated with a degree in Economicsfrom the University of Colorado. Jeff has overall responsibility for themanagement and development of Sovereign's business. Greg Cobb, CFA - Managing Director, Portfolio Management (46). Prior to joiningSovereign in 1999 he served as a Senior Portfolio Manager for the fixed incomedivisions of Bank of America, Trustco Capital Management and Barnett Banks. Hegraduated with a degree in Economics from the University of North Carolina. Aswell as acting as Managing Director of Portfolio Management, he is the seniorportfolio manager for taxable investments. Chris Eckstrom - Senior Portfolio Manager (37). Prior to joining Sovereign in2006 he managed fixed income portfolios, with a specialization in the municipalsector, for the Columbia Management Group, an investment management subsidiaryof the Bank of America. He has a degree in Aeronautical Science fromEmbry-Riddle Aeronautical University and an MBA from St. Bonaventure University.He is the portfolio manager for all municipal investments. Frank Wilkinson - Managing Director Business Development (72). Prior to joiningSovereign in 2006 he was Managing Director of Fixed Income Investments for AssetManagement of the South and Director of Fixed Income Investments with MountainCapital LLC. He has a degree in Economics from John Hopkins University and anMBA from the NYU Graduate School of Business Administration. He is the head ofmarketing with responsibility for monitoring all sales personnel and thepreparation of marketing reports. Denise Fohr - Operations and Compliance Manager (36). Prior to joining Sovereignin 2005 Denise carried out a range of investment operations and compliance roleswith Smith Barney in Pittsburgh and Boston. She is responsible for theoperations department and for all compliance procedures. Summary Terms of the Acquisition Wood The Company has entered into an agreement (the "Wood Acquisition Agreement")with Wood and the shareholders of Wood. Pursuant to the terms of the WoodAcquisition Agreement, the Company has agreed to acquire all of the issued sharecapital of Wood, all upon the terms and subject to the conditions set forth inthe Wood Acquisition Agreement and in accordance with the relevant provisions ofapplicable law. Each of the shareholders of Wood is to receive their respective pro rata shareof the purchase price of $31,500,000 (being, in aggregate, $27,500,000 in cashand $4,000,000 to be satisfied by the issue of 727,273 Common Shares). In addition Mr. Gary Wood is to receive earn-out payments in the amount of up to$4,000,000 and revenue bonuses in the amount of up $2,000,000 if certainconditions set forth in the Wood Acquisition Agreement are met. Sovereign The Company has entered into an agreement (the "Sovereign AcquisitionAgreement") with Sovereign and JARE, INC. ("JARE"). Pursuant to the terms of theSovereign Acquisition Agreement, the Company has agreed to acquire all of theissued membership interests of Sovereign, all upon the terms and subject to theconditions set forth in the Sovereign Acquisition Agreement and in accordancewith the relevant provisions of applicable law. JARE is to receive a purchase price of $5,500,000 (being, in aggregate,$4,500,000 in cash and $1,000,000 to be satisfied by the issue of 181,818 CommonShares). In addition JARE is to receive earn-out payments in the amount of up to$3,000,000 and revenue bonuses in the amount of up $2,000,000 if certainconditions set forth in the Sovereign Acquisition Agreement are met. SKC The Company has entered into an agreement (the "SKC Transfer Agreement") withSKC. Pursuant to the terms of the SKC Transfer Agreement SKC will notify all ofits clients that SKC will terminate its investment advisory contracts with itsclients and will encourage all of its clients to engage the Company as their newregistered investment adviser and enter into a new investment advisory, subadvisory or other contract with the Company, all upon the terms and subject tothe conditions set forth in the SKC Transfer Agreement and in accordance withthe relevant provisions of applicable law. SKC is to receive a cash amount equal to 0.5% of the amount of assets undermanagement of the client contracts entered into by the Company with previousclients of SKC. Such amount is to be paid in two installments: (i) the amountdue for client contracts entered into and existing as of a date six months fromthe date of the acquisition of a target business; and (ii) the amount due forclient contracts entered into from the date in (i) above to a date six monthsthereafter. The Directors, other than Mr, Sauickie, having consulted with the Company'snominated adviser, Seymour Pierce, consider that the terms of the SKC TransferAgreement are fair and reasonable insofar as Stockholders are concerned.Completion of the Acquisition is conditional upon, inter alia, the approval ofthe Acquisition by shareholders of Titanium at the Special Meeting and theentire issued and to be issued Common Shares and Warrants being re-admitted to trading on AIM. Admission Document and Special Meeting The Admission Document setting out details of the Acquisition and including thenotice of the Special Meeting, accompanied by a Proxy Card, is being posted toStockholders today. The Special Meeting has been convened for 3 p.m. (UK time)/ 10 a.m. (EDT) on 27 September 2007 at the offices of Mintz, Levin, Cohn,Ferris, Glovsky & Popeo, P.C., The Chrysler Center, 666 Third Avenue, 25thFloor, New York, NY 10017. Copies of the Admission Document will be available to the public free of chargefrom today at the offices of Seymour Pierce Limited, 20 Old Bailey, London EC4M7EN during normal business hours on any weekday (other than Saturdays, Sundaysand public holidays), until one month following the date of admission and willbe available for review and download at www.ti-am.com. For further information: Titanium Asset Management Corp.John Sauickie, Chief Executive Officer +1 941 524 5672Nigel Wightman, Executive Director + 44 7789 277849 Seymour Pierce LtdJonathan Wright +44 20 7107 8000 Penrose Financial Gay Collins +44 7798 626 282Kay Larsen +44 7747 631 614 This announcement does not constitute, or form part of, an offer or aninvitation to purchase any securities or to carry on any investment activitywhatsoever. This information is provided by RNS The company news service from the London Stock Exchange