* To sell ClearPoint unit to Ocwen financial
* Fourth-quarter loss $0.09/shr vs profit $0.01/shr year ago
* To ask shareholders to approve reverse stock split
* Shares fall as much as 29 percent
Feb 15 Investment bank Gleacher & Co Inc
gave up its search for a buyer or fresh capital and
reported its fourth quarterly loss in a row, sending its shares
sliding nearly 30 percent.
Gleacher, which had put itself up for sale in the wake of a
prolonged slump in the merger and advisory business, said on
Friday it would sell its mortgage lending unit ClearPoint to
Ocwen Financial Corp for an undisclosed price.
Gleacher, founded by merger and acquisition veteran Eric
Gleacher and with a market value of about $120 million, reported
a fourth-quarter loss from continuing operations of $11.5
million, or 10 cents per share.
"Although we did not believe any proposal we received during
the process adequately reflected Gleacher's value, we will, as
before, be opportunistic in considering value-building strategic
initiatives," Chief Executive Thomas Hughes said in a statement.
Eric Gleacher, who founded the company in 1990, stepped down
as its chairman last month.
He created the mergers and acquisitions department at Lehman
Brothers in 1978 and ran global M&A at Morgan Stanley
from 1985 to 1990.
During his time at Morgan Stanley, he advised private equity
giant Kohlberg Kravis Roberts in its famous takeover
battle for RJR Nabisco and featured in the bestselling book on
the deal, "Barbarians at the Gate".
The company said the board renewed its stock repurchase
program, authorizing up to $10 million in buybacks.
On a conference call with analysts, CEO Hughes said the
company will also ask shareholders at its upcoming annual
meeting to approve a reverse stock split.
That would raise the company's per-share stock price and
help it avoid delisting on the Nasdaq Stock Market for trading
below $1 a share since the spring of 2012.
MBS REVENUE FALLS
Gleacher said net revenue for the quarter ended Dec. 31 rose
18 percent to $50.9 million, helped by strong investment banking
results. Investment banking revenue surged to $12.7 million from
However, revenue in the mortgage-backed securities (MBS) and
interest rates business more than halved to $6.1 million.
"We have a revenue issue," Hughes said, regarding the MBS &
rates business. While investment banking is making rapid
progress, the company is "still working on taking two steps
forward" in the mortgage and rates business, he said.
In the quarter, the company paid out nearly 82 percent of
its revenue in compensation and benefits, far higher than the 60
percent it paid out last year.
Hughes said annual compensation is likely to rise to 70
percent of revenue this year because revenue will fall with the
sale of ClearPoint, which is expected to be completed in the
Shares of the company, which traded at $10 per share before
the financial crisis, fell as much as 29 percent to 67 cents in
early trading on the New York Stock Exchange on Friday.