In August, amid calls by some shareholders for board members to step down, Highbury Financial
formed a special committee to explore strategic alternatives
for the Denver firm. That exploration culminated in a $117 million deal on Saturday, under which
Aston Asset Management
's owner agreed to sell itself to Affiliated Managers Group
On November 25, Peerless Systems
-- Highbury's largest
shareholder with a 20.4 percent interest -- sent a letter to shareholders soliciting proxies for the election of Peerless chairman Tim Brog
to the Highbury board (click
to view the letter). Peerless is also pushing for the declassification of the board and the redemption of the poison pill. The annual meeting of stockholders is scheduled for December 29.
Highbury, a holding company started by executives from investment bank
, acquired Aston from ABN-AMRO
for $38.6 million in 2006.
Highbury chairman Bruce Cameron
, president and CEO Dick Foote
financial officer Brad Forth
are among Berkshire's 13 partners.
Berkshire Capital served as financial advisor to Highbury's board and Bingham
provided legal advice, Forth told The MFWire
. As for the special committee -- composed of
and ex-Berkshire employees Hoyt Ammidon Jr.
and Aidan Riordan
was the financial advisor and Debevoise & Plimpton
was the legal advisor.
According to an
, the contract between Highbury and Berkshire states that if Highbury enters an agreement to sell on or before September 18, 2011,
Highbury will pay Berkshire a "success fee at closing equal to the greater of (x) 1.0 percent of the aggregate consideration
in such transaction and (y) $1.000,000."
If Highbury makes an acquisition during the term of Berkshire's engagement or two years thereafter,
Highbury will pay Berkshire three percent of the first $15 million of the purchase price or $600,000, whichever is greater.
If Highbury makes an acquisition, Highbury will pay Berkshire $200,000; if it sells, it will pay Berkshire $150,000. In each case, the amount
will be credited against the success fee.
Under the agreement with AMG, Highbury will merge with Manor LLC
, a newly formed Delaware
limited liability company and wholly owned AMG subsidiary. AMG will have a majority stake in Chicago-based Aston, whose brand, management,
employees and sub-advisors will remain unchanged after the deal closes in the middle of next year.
For Aston, which offers 24 sub-advised funds with total AUM of $6 billion as of September 30, this marks
the third ownership change in the 16-year-old fund firm's history. The fund family began life as CT&T Funds
, whose initial shareholders were Chicago Title & Trust Company
clients who rolled their 401(k) assets into CT&T's initial three funds. It rebranded as Alleghany Funds
in 1996, was sold to ABN-AMRO in 2000 and became ABN-AMRO Funds, and in 2006 was purchased by Highbury Financial and was rechristened Aston Funds.
Aston chairman and CEO Stuart Bilton
, president Ken Anderson
and other key Aston employees entered into an employment agreement on Saturday, which will become effective upon the merger's close. Bilton's agreement spans four years, while Anderson's and other
key staffers' contracts each have a 15-year term, according to an
Highbury's deal to sell itself comes two weeks after Highbury's compensation committee on approved incentive bonuses of
$284,000 for Foote, $142,000 for Forth and $142,000 for Cameron (click
to view the SEC filing). Also on November 25, in connection with the exploration
of strategic alternatives, the special committee and compensation committee approved retention bonuses of $300,000
for Foote and $292,000 for Cameron.
Peerless has been a Highbury stockholder since March.
Brog, Peerless' chairman, is an activist investor who
battled bubble gum and candy maker Topps Company
and walked away with a seat on Topps' board.
On July 1, Brog and representatives of three other dissident
shareholders sat down with Foote in Chicago, demanding
change in Highbury's board and management.
Two business days before the meeting, Highbury's board voted to amend the corporate bylaws to prohibit shareholders to call special shareholder meetings, lengthen the notice needed to nominate directors and present shareholder proposals, and to require a two-thirds majority of shareholders to create further changes to the corporate bylaws.
On August 10, Highbury announced that it was buying the 35 percent of Aston that it didn't already own, and the election of Bilton, Anderson and John Weil
to the board of directors.
It also announced that it formed a special committee to evaluate strategic alternatives and that it adopted a stockholder rights
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