Gleacher explores sale, capital infusion options
(Reuters) - Investment bank Gleacher & Co Inc (GLCH.O) said it was exploring strategic alternatives, including raising more capital or even a possible sale of the 12-year-old company founded by merger and acquisition veteran Eric Gleacher.
The company's shares rose nearly 7 percent to 81 cents in early trading on the Nasdaq.
Small investment banks, like their larger rivals, have been walloped by the slowdown in merger activity, which fell 25 percent worldwide in the first half of 2012.
Pritchard Capital Partners, a small investment bank specializing in the energy industry, folded its operations in July due to a shortage of capital that meant it was unable to ride out the dry spells in the market.
Gleacher has been struggling to retain its listing on the Nasdaq amid continuing losses and a plummeting stock price.
The company has installed new management, dropped its equities trading unit and pushed to bolster its mortgage banking business in the past year.
The firm appointed Randolph Barker, former co-head of fixed income, commodities and currencies group at Citigroup (C.N), to head its investment banking and capital markets division earlier this week.
Gleacher, which has a market capitalization of about $95 million, said it hired a financial advisor to help with the process but did not disclose the advisor's name.
However, Bloomberg reported that the company's board had hired Credit Suisse Group AG (CSGN.VX) to solicit offers amid pressure from top investor, private equity firm MatlinPatterson Global Advisers LLC.
Eric Gleacher, who founded the company in 1990, created the mergers and acquisitions department at Lehman Brothers in 1978 and ran global M&A at Morgan Stanley (MS.N) from 1985 to 1990. He is now chairman of his eponymous firm.
During his time at Morgan Stanley, Gleacher advised private equity giant Kohlberg Kravis Roberts (KKR.N) in its famous takeover battle for RJR Nabisco and featured in the bestselling book on the deal, "Barbarians at the Gate."
Gleacher shares, which traded at as much as $9 a share in 2009 have lost more than 90 percent of their value since then and have been trading below $1 a share since May.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Joyjeet Das)
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