China Energy To Acquire 19.9% Stake In Cowen As Part Of Strategic Partnership

Financial services firm Cowen Group Inc. said Tuesday it has agreed a strategic partnership with China Energy Company Ltd, or CEFC, under which the Chinese company will acquire a 19.9% stake in Cowen. CEFC will pay about $100 million for the stake and will provide Cowen with debt financing of $175 million in the form of a loan. CEFC is the largest private company in Shanghai and seventh largest private company in China, according to a joint statement. CEFC will pay $18 a share for the stake, equal to a 29.5% premium over Cowen's closing share price on March 28. CEFC will have the right to appoint three directors to the Cowen's board, boosting the total to eleven. The equity investment and debt financing are expected to close by the end of the third quarter. Cowen shares were halted premarket for the news, but have lost 10% in the year so far, while the S&P 500 has gained 5%.