Shares In Troubled Gerova Tumble On NYSE
Seymour Pierce, the British broker and private investment bank, could be close to seeing its £40 million takeover by Gerova Financial Group falter after the Bermuda-based reinsurer’s newly appointed chairman refused to take the role and shares in the troubled firm plunged by more than a third on the New York Stock Exchange yesterday [Feb 16].
Last year Seymour Pierce announced plans for a merger with the Bermuda-headquartered diversified financial outfit, with the London firm’s CEO Keith Harris taking over as chairman of the newly combined company once the deal was closed. The merger had been expected to be finalised by March.
A charismatic figure, former English Football League chairman Mr. Harris is best-known in Britain for his role in advising a number of football clubs on takeovers, having led the consortium that was looking to buy Manchester United from the Glazer family.However, Mr. Harris announced this week he has delayed taking up his new position following a management and board overhaul at Gerova prompted by allegations assets on its books are overvalued and the Bermuda firm is a “shell game”. And various financial media sources are now saying the proposed Seymour Pierce merger with Gerova – which would have resulted in a a £400m company — may be in jeopardy.
Shares in Gerova slumped by almost $3 on Wednesday, closing at $6.39 on the NYSE after the news that entrepreneur Dennis Pelino would not be taking on his new role following the resignation of previous chairman Garry Hirst. Mr. Pelino’s aborted appointment was part of a sweeping shake-up of the Bermuda firm’s management and board intended to underscore Gerova was “committed to transparency and consistent communication with our shareholders.”
