May 19, 2009 / 6:00 AM / 11 years ago

UPDATE 1-Arlington to sell half FBR Capital stake for $73 mln

* Deal to reduce Arlington stake to 39 pct from 56 pct

* FBR to repurchase 16.7 mln shares at $4.35/shr

* Says will sell remaining stake on close

(Adds details, background)

May 19 (Reuters) - Arlington Asset Investment Corp FBR.N, formerly Friedman, Billings, Ramsey Group Inc, said it will sell about half of its stake in FBR Capital Markets Corp FBCM.O for about $72.5 million, following a stock repurchase agreement.

Arlington said its investment and institutional brokerage firm FBR Capital Markets will repurchase 16.7 million shares for $4.35 per share. The shares closed at $4.60 Monday on Nasdaq.

The stock sale, which is expected to close on or before June 2, will reduce Arlington’s ownership stake in FBR Capital Markets to 39 percent from 56 percent, Arlington said in a statement.

“Along with $172 million of gains from recent redemptions of trust preferred securities, the sale of these shares is a meaningful step for Arlington as it clarifies our focus as a principal investment firm and frees up capital to pursue other corporate and investment options,” Chief Operating Officer J. Rock Tonkel said.

The two companies also agreed to terminate certain intercompany services and governance agreements and said they will cooperate to sell the remaining stake of Arlington when the current deal closes.

Shares of the Washington-based company closed at 44 cents on Monday on the New York Stock Exchange. (Reporting by Anurag Kotoky in Bangalore; Editing by David Holmes)

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