UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

SCHEDULE 14A
AMENDMENT NO. 2

 

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

þ  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material under Rule 14a-12

 

GLG PARTNERS, INC.

(Name of Registrant as Specified In Its Charter)

 

N/A

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

o  No fee required.

 

þ  Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11

 

 

Common stock, par value $0.0001 per share, of GLG Partners, Inc. (“Common Stock”)

 

 

323,717,487 shares of Common Stock*

 

 

The maximum aggregate value of the transaction was determined by calculating the sum of (i) the product of 160,887,080 shares of Common Stock that may be exchanged for cash in the transaction, multiplied by the $4.50 per share cash merger consideration, (ii) the product of 149,900,926 shares of Common Stock that will be exchanged by the Selling Stockholders (as defined below) for shares of Man Group plc in the transaction, multiplied by the average of the high and low sales prices of Common Stock on The New York Stock Exchange on August 5, 2010 of $4.40 per share, and (iii) the product of awards under GLG Partners, Inc.’s stock plans which represent a right to receive 12,929,481 shares of Common Stock upon satisfaction of vesting conditions, which shall be assumed by Man Group plc in the transaction and shall be settleable in shares of Man Group plc following the transaction upon satisfaction of such vesting conditions, multiplied by the average of the high and low sales prices of Common Stock on The New York Stock Exchange on August 5, 2010 of $4.40 per share. In accordance with Exchange Act Rule 0-11(b), the filing fee was determined by multiplying

0.00007130 by the maximum aggregate value of the transaction.

 

 

 

$102,704

 

þ  Fee paid previously with preliminary materials.

 

 

 

 

 

 

 

 

 

 

 

PRELIMINARY PROXY STATEMENT, SUBJECT TO COMPLETION
DATED AUGUST 27, 2010

 

GLG PARTNERS, INC.

399 Park Avenue, 38th Floor

New York, New York 10022

 

 

To Our Stockholders:

 

We cordially invite you to attend the special meeting of stockholders of GLG Partners, Inc. to be held at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, New York 10112 on September   , 2010, at 10:00 a.m., Eastern Time. The Board of Directors has fixed the close of business on August 30, 2010 as the record date for the purpose of determining the stockholders entitled to receive notice of and vote at the special meeting and any adjournment or postponement of the special meeting.

 

On May 17, 2010, we agreed to be acquired by Man Group plc, subject to, among other things, the approval of the respective stockholders of Man and GLG as described in the accompanying proxy statement. The proposed acquisition is contemplated to be made through two concurrent transactions: a cash merger under an Agreement and Plan of Merger dated as of May 17, 2010, as amended, among Man, Escalator Sub 1 Inc. (a wholly owned subsidiary of Man) and GLG; and a share exchange under a Share Exchange Agreement dated as of May 17, 2010 among Man and Noam Gottesman, Pierre Lagrange and Emmanuel Roman, together with their related trusts and affiliated entities, two limited partnerships that held shares for the benefit of key personnel who are participants in GLG’s equity participation plans and the permitted transferees of such limited partnerships.

 

At the special meeting, you will be asked to consider and vote upon a proposal to adopt the merger agreement. If the merger is completed, GLG’s stockholders (other than parties to the share exchange agreement (with respect to the shares subject thereto), Man and its subsidiaries, GLG and certain of its subsidiaries, stockholders who properly exercise and perfect their appraisal rights under Delaware law, and holders of restricted shares and other awards to receive shares of our common stock under our stock incentive plans) will have the right to receive, for each share of our common stock they hold at the time of the merger, $4.50 in cash.

 

Upon completion of the proposed merger, we will cease to be a publicly traded company and Man will own 100% of our outstanding securities. As a result, you will no longer have any direct or indirect equity interest in GLG or any interest in our future earnings or growth, if any. Following completion of the merger, the registration of our common stock and our reporting obligations with respect to our common stock under the Securities Exchange Act of 1934 are expected to be terminated. In addition, upon completion of the merger, shares of our common stock will no longer be listed on the New York Stock Exchange.

 

After careful consideration, our Board of Directors has determined that the merger is advisable and that the terms of the merger are fair to, and in the best interests of, GLG and its stockholders and, therefore, has approved the merger agreement, the merger and the other transactions contemplated by the merger agreement, and recommends that you vote “FOR” adoption of the merger agreement. This recommendation of our Board of Directors is based upon the unanimous recommendation of a special committee of the Board of Directors consisting of three independent and disinterested directors, who were advised by an independent financial advisor on the fairness of the value of the cash merger consideration and by independent legal counsel.

 

In considering the recommendation of our Board of Directors with respect to the merger, you should be aware that some of our directors have interests in the merger that are different from, or in addition to, the interests of our stockholders generally. For example, each of Noam Gottesman, Pierre Lagrange and Emmanuel Roman will enter into employment or service agreements with Man entities providing for, among other things, the payment of salaries, and each of them, through their respective trusts, holds our convertible notes, which pursuant to their terms

upon conversion during a specified period following the merger will be entitled to a make-whole premium, in addition to the right to receive a cash amount equal to the merger consideration for each share of common stock into which the notes are convertible. In addition, outstanding restricted stock awards held by our non-employee directors will be accelerated and paid a cash amount equal to the merger consideration for each restricted share as a result of the merger. Moreover, indemnification and directors’ and officers’ liability insurance coverage will continue to be provided by the surviving corporation in the merger to our current and former officers and directors. Furthermore, pursuant to the terms of the merger agreement, we are required to use reasonable best efforts to launch a tender offer to purchase all of our outstanding warrants to purchase shares of our common stock, including warrants held by certain of our directors. Finally, compensation will be paid to the directors serving on the special committee.

 

In addition, you are being asked at the special meeting to approve the adjournment of the special meeting, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement. Our Board of Directors unanimously recommends that you vote “FOR” the adjournment of the special meeting, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement. The accompanying notice of special meeting and proxy statement provide information regarding the matters to be acted on at the special meeting, including any adjournment or postponement of the special meeting. Please read these materials carefully.

 

YOUR VOTE IS VERY IMPORTANT, regardless of the number of shares you own. We cannot complete the merger unless the holders of a majority of the outstanding shares of GLG common stock (excluding (i) Noam Gottesman, Pierre Lagrange and Emmanuel Roman, together with their related trusts and affiliated entities, (ii) the permitted transferees of two limited partnerships that held shares for the benefit of key personnel who are participants in GLG’s equity participation plans, (iii) Man and its affiliates, (iv) GLG and its affiliates (other than directors serving on the special committee of the GLG Board of Directors) and (v) employees of GLG) entitled to vote on the matter vote to adopt the merger agreement. Once you have read the accompanying materials, please take the time to vote on the matters submitted to stockholders at the special meeting, whether or not you plan to attend the special meeting. I urge you to submit a proxy to vote your shares promptly by using the telephone or Internet or by signing and returning the enclosed proxy card. Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the special meeting in person. Your vote in person will revoke any proxy previously submitted.

 

If your shares are held in “street name” by your broker, bank or other nominee, your broker, bank or other nominee will be unable to vote your shares on the merger proposal or the adjournment proposal without instructions from you. You should instruct your broker, bank or other nominee to vote your shares by following the procedures provided by your broker, bank or other nominee.

 

Our Board of Directors and management urge you to vote “FOR” each of the proposals.

 

Sincerely,

 

Noam Gottesman

Chairman of the Board and Co-Chief Executive Officer

 

Neither the Securities and Exchange Commission nor any state securities regulatory agency has approved or disapproved the merger, passed upon the merits or fairness of the merger or passed upon the adequacy or accuracy of the disclosure in this document. Any representation to the contrary is a criminal offense.

 

The proxy statement is dated August   , 2010 and is first being mailed to stockholders on or about August   , 2010.

 

GLG PARTNERS, INC.
399 Park Avenue, 38th Floor
New York, New York 10022

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held September   , 2010

 

To Our Stockholders:

 

Notice is hereby given that a special meeting of stockholders of GLG Partners, Inc. (“GLG”) will be held on September   , 2010, at 10:00 a.m., Eastern Time, at the offices of Chadbourne & Parke LLP, 30 Rockefeller Plaza, New York, New York 10112 for the following purposes:

 

1. To consider and vote on a proposal to adopt the Agreement and Plan of Merger dated as of May 17, 2010, as amended, among GLG, Man Group plc, a public limited company existing under the laws of England and Wales (“Man”), and Escalator Sub 1 Inc., a Delaware corporation and a wholly owned subsidiary of Man (the “Merger Proposal”).

 

2. To approve the adjournment of the special meeting, if necessary, to permit further solicitation and vote of proxies if there are insufficient votes at the time of the special meeting to approve the Merger Proposal (the “Adjournment Proposal”).

 

3. To transact such other business as may properly come before the meeting or any adjournment or postponement of the special meeting.

 

Only stockholders who owned shares of our common stock and Series A voting preferred stock at the close of business on August 30, 2010 will be entitled to notice of, and to vote at, the meeting or any adjournments or postponements of the meeting. A complete list of stockholders entitled to vote at the meeting will be available for examination by any stockholder, for any purpose relating to the meeting, during ordinary business hours at our principal offices located at 399 Park Avenue, 38th Floor, New York, New York 10022 at least ten days before the special meeting.

 

We urge you to read the accompanying proxy statement carefully as it sets forth details of each proposal to be voted on, including the proposed merger and other important information related to the merger.

 

Under Delaware law, if the merger is completed, holders of our common stock who do not vote in favor of the Merger Proposal and who otherwise properly perfect their demand for appraisal under Delaware law will have the right to seek appraisal of the fair value of their shares as determined by the Delaware Court of Chancery. In order to exercise your appraisal rights, you must (i) submit to GLG a written demand for an appraisal prior to the stockholder vote on the Merger Proposal, (ii) not vote in favor of the Merger Proposal, nor consent thereto in writing, (iii) continue to hold your shares until the consummation of the merger and (iv) comply with other Delaware law procedures explained in the accompanying proxy statement.

 

Your vote is important and we urge you to submit your proxy for voting at the special meeting on the Internet, by telephone or by completing, signing, dating and returning your proxy card as promptly as possible by mail, whether or not you expect to attend the special meeting. If you are unable to attend in person and you submit your proxy on the Internet, by telephone or by returning your properly executed proxy card in time for the special meeting, your shares will be voted at the special meeting in accordance with your instructions as reflected on your proxy. Properly executed proxies that do not contain voting instructions will be voted “FOR” the approval of the Merger Proposal and “FOR” approval of the Adjournment Proposal. If your shares are held in “street name” by your broker, bank or other nominee, only that holder can vote your shares unless you obtain a valid legal proxy from your broker, bank or nominee. You should follow the directions provided by your broker, bank or nominee regarding how to instruct such broker, bank or nominee to vote your shares.

 

The merger is described in the accompanying proxy statement, which we urge you to read carefully. Copies of the merger agreement, the amendment to the merger agreement, the share exchange agreement and the other transaction-related documents are attached as appendices to the proxy statement.

 

Your Board of Directors recommends that you vote in favor of the Merger Proposal and the Adjournment Proposal. Please refer to the proxy statement for detailed information on each of the proposals.

 

By Order of the Board of Directors,

 

Alejandro R. San Miguel

Secretary

 

New York, New York

August   , 2010

 

TABLE OF CONTENTS

 

 

References to “GLG”, the “Company”, “we”, “our” or “us” in this proxy statement refer to GLG Partners, Inc. and its subsidiaries unless otherwise indicated by context. The following summary, together with “Questions and Answers About the Merger and the Special Meeting of Stockholders”, highlights selected information contained in this proxy statement. You should carefully read this entire proxy statement and the other documents to which this proxy statement refers you for a more complete understanding of the matters being considered at the special meeting of stockholders. In addition, this proxy statement incorporates by reference important business and financial information about GLG. You may obtain the information incorporated by reference into this proxy statement without charge by following the instructions under “Where You Can Find More Information”. References to “$” in this proxy statement refer to U.S. dollars.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

We refer to the vote described in clause (ii) as the “Minority Stockholder Approval”.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following questions and answers are intended to address briefly some commonly asked questions regarding the merger and the special meeting. These questions and answers may not address all questions that may be important to you as a GLG stockholder. Please refer to the “Summary Term Sheet” and the more detailed information contained elsewhere in this proxy statement, the appendices to this proxy statement and the documents referred to or incorporated by reference in this proxy statement, which you should read carefully.

 

 

 

 

 

Prior to becoming a U.S. publicly traded company in November 2007, GLG explored various alternative transactions and engaged in substantive discussions with Man, among others, concerning a potential transaction involving the two companies. Although no transaction was pursued at the time, Man and GLG executives continued to have regular interactions at industry conferences and other industry-related events. In addition, each of Messrs. Roman and Clarke is presently a trustee of The Hedge Fund Standards Board.

 

During 2008, the complexion of GLG’s business changed substantially against a backdrop of redemptions by investors, severe capital market dislocations, and decreased investment performance. In response to this and significant declines in GLG’s own assets under management (“AUM”), GLG undertook various initiatives and weighed strategic options to strengthen its platform. Among these was the April 2009 acquisition of Société Générale Asset Management UK (“SGAM UK”), which added approximately $7.0 billion of AUM, including approximately $3.0 billion of AUM that GLG had been managing under a sub-advisory arrangement with SGAM UK since the December 2008 announcement of the SGAM UK acquisition. While the acquisition of SGAM UK and other measures increased GLG’s overall AUM and improved its cost structure, profitability remained below historical levels, reflecting greater representation of long-only AUM and fewer funds and managed accounts in a position to earn performance fees. At the same time, GLG’s infrastructure and asset management capabilities continued to be able to support much greater AUM. These factors, together with concerns regarding the potentially protracted recovery of higher fee-yielding assets, uncertainty about the prospects of geographic expansion outside of GLG’s historic U.K. and European markets and a challenging macroeconomic environment, led the Individual Principals to discussions among themselves during 2009 as to whether GLG should seek a strategic alliance or other combination with another sizeable asset manager with a complementary business.

 

Man’s AUM also declined in 2008 and 2009 but throughout the period Man reported a strong capital surplus. For example, for the six months ended September 30, 2009, Man reported a regulatory capital surplus of approximately $1.6 billion and cash balances of approximately $2.1 billion and these capital resources positioned Man strongly to address opportunities in its industry and invest further in its business. Of particular interest to Man in this regard were growth opportunities, including through acquisition, consistent with Man’s strategy to acquire high quality discretionary investment management capability providing the potential to broaden the range of diversified, liquid strategies for the benefit of its investors and to provide a more diversified source of income for Man shareholders.

 

In March 2009, Emmanuel Roman, Co-Chief Executive Officer of GLG, met with Peter Clarke, Chief Executive Officer of Man, at Man’s offices in London to discuss generally areas where their businesses might work together. The discussions between the parties were general and preliminary, did not contain specific details with respect to a transaction and did not progress further at that time.

 

On May 15, 2009, Pierre Lagrange, Senior Managing Director of GLG Partners LP and a member of GLG’s board of directors (the “GLG Board”), met Lance Donenberg, Head of Strategic Investments for Man’s Principal Strategies Group, at Man’s Chicago offices. Messrs. Lagrange and Donenberg had preliminary discussions about the business strategies of their respective companies. Thereafter, Messrs. Lagrange and Donenberg continued to talk from time to time; however, there were no specific discussions regarding the structure of a potential transaction.

 

In September 2009, Mr. Roman asked representatives of Goldman Sachs to help GLG develop an understanding of Man’s business and whether there may be potential for a business fit, including an assessment of strategic rationale and a range of possible transaction structures without focusing on any specific structure.

 

On October 1, 2009, representatives of Goldman Sachs made a presentation to Messrs. Lagrange and Roman to help them develop a better understanding of Man’s business and whether there was potential for a business fit, including an analysis of Man’s business fundamentals and preliminary valuation, strategic, structure and capital markets considerations.

 

On October 7, 2009, John Rowsell, Head of Man’s Principal Strategies Group, called Mr. Lagrange to engage in further preliminary discussions about their respective companies, including about GLG’s evolution, development and infrastructure. The conclusion of these discussions was to have a further meeting in person.

On November 4, 2009, Messrs. Rowsell, Donenberg and Urs Alder, Head of Product Strategy for Man’s Principal Strategies Group, met with Messrs. Lagrange, Roman and Mark Jones of GLG at GLG’s offices in London, England and had further preliminary discussions about the investments and portfolios of their respective companies. The conclusion of these discussions was to engage in discussions with respect to the potential for a transaction.

 

In connection with Man’s search for opportunities to diversify its business, one of the topics discussed at the annual strategic review meeting of the board of directors of Man (the “Man Board”) in December 2009 was Man’s acquisition strategy, and GLG was identified as one of a number of potential acquisition targets.

 

On January 21, 2010, Messrs. Clarke and Lagrange met and had preliminary discussions about their respective companies, potential opportunities for the businesses to work together, the financial markets, Man’s market positioning and GLG’s and Man’s respective market penetration, geographies and investment styles. The conclusion of these discussions was to continue discussions on these same matters.

 

On January 24, 2010, Messrs. Lagrange and Donenberg met at an industry conference and had further preliminary discussions regarding possible strategic alternatives involving the two companies, including joint or cross distribution arrangements whereby the two companies would distribute each other’s respective products, a non-controlling investment by Man in GLG, and possible asset management joint ventures. Mr. Lagrange inquired about Man’s sales capabilities and process during this meeting.

 

On February 4, 2010, Messrs. Lagrange, Roman and Noam Gottesman, Chairman and Co-Chief Executive Officer of GLG, met with Messrs. Clarke and Rowsell to discuss whether there was sufficient interest in pursuing a possible transaction to warrant a preliminary exchange of information between Man and GLG for due diligence purposes.

 

On February 9, 2010, Mr. Roman met with representatives of Goldman Sachs to inform them about the exploratory discussions held between GLG’s and Man’s principals regarding possible strategic alternatives involving the two companies described above.

 

On February 12, 2010, Alejandro San Miguel, the General Counsel and Corporate Secretary of GLG, received a call from Stephen Ross, the General Counsel of Man. Mr. Ross informed Mr. San Miguel that Man was in the process of retaining bankers and counsel to evaluate a possible transaction between the two companies and that he would be arranging for delivery to Mr. San Miguel of a draft of a mutual non-disclosure agreement. Thereafter, Mr. San Miguel advised Messrs. Gottesman, Roman and Lagrange of his call with Mr. Ross and engaged Chadbourne & Parke LLP to assist in negotiating the mutual non-disclosure agreement. On the same day, Mr. Roman communicated to Messrs. Gottesman, Lagrange and San Miguel that he proposed that GLG appoint Goldman Sachs as its financial advisor in connection with the transaction.

 

On February 16, 2010, Man delivered an initial draft of the mutual non-disclosure agreement to Mr. San Miguel.

 

On February 22, 2010, at a meeting of the GLG Board, Messrs. Gottesman, Roman and Lagrange reported to the other board members the substance of their preliminary discussions with Man and their desire to initiate exploratory discussions regarding a possible transaction with Man. Mr. San Miguel reported on his conversation with Mr. Ross and the terms of the draft mutual non-disclosure agreement delivered to him by Man. The GLG Board authorized execution of a mutual non-disclosure agreement and a limited exchange of information but reserved judgment on the issue as to whether GLG should allow full due diligence on GLG or conduct full due diligence on Man until further analysis of issues relating to any possible transaction had been developed.

 

On February 23, 2010, representatives of Goldman Sachs delivered to Messrs. San Miguel and Rojek presentation materials containing a review of GLG and Man financial projections based on research analyst estimates, preliminary financial analyses, including market performance, selected companies and pro forma transaction analyses and analysis at various prices, a discussion of potential sources of synergies and preliminary areas of investigation of Man.

 

On February 25, 2010, Messrs. Clarke and Lagrange spoke by telephone about GLG’s governance process in relation to a possible transaction.

Also on February 25, Messrs. San Miguel, Jones and Jeffrey Rojek, Chief Financial Officer of GLG, met with Messrs. Ross and Jasveer Singh, Head of Legal of Man, to discuss the mutual non-disclosure agreement and process matters relating to timing, accounting reconciliation, U.S. securities registration requirements and other matters, including regulatory approvals and other deal mechanics based on various hypothetical transaction structures.

 

Over the course of the following week, several drafts of the non-disclosure agreement were exchanged and its terms negotiated, including the addition of a standstill provision restricting Man’s ability to make a proposal to acquire GLG without the consent of GLG for a period of eighteen months following the execution of the non-disclosure agreement. GLG and Man entered into a mutual non-disclosure and standstill agreement dated as of March 1, 2010.

 

Between March 2 and March 26, 2010, Messrs. San Miguel and Rojek provided informal updates from time to time to non-executive members of the GLG Board regarding the status of discussions with Man. During the same period, Messrs. Clarke and Lagrange had phone calls from time to time to discuss the status of the discussions between the two companies.

 

On March 5, 2010, Messrs. Gottesman, Roman and San Miguel spoke by telephone with Mr. Clarke to discuss establishing a process for structuring a possible transaction involving GLG and Man. The representatives of GLG also stated that any transaction should have a significant stock component in the consideration. The parties also discussed that the Individual Principals should become significant shareholders of Man as a result of any transaction in order to align their interests with those of shareholders post-acquisition. The GLG representatives suggested that therefore, Man should consider registering its shares for issuance in order to facilitate a share-for-share exchange, even if Man subsequently decides to deregister the shares. The GLG representatives also indicated that it was important that there be a well thought out retention plan in place below the board level before any announcement of a transaction.

 

On March 6, 2010, representatives of Goldman Sachs had a telephone discussion with Messrs. Roman, San Miguel, Rojek and Jones regarding materials provided by Goldman Sachs containing an updated review of GLG and Man financial projections based on research analyst estimates and preliminary financial analyses, including market performance, selected companies and pro forma transaction analyses and analysis at various prices.

 

On March 8, 2010, Messrs. Clarke, Ross and Singh of Man and Messrs. Roman, Lagrange, San Miguel and Jones of GLG met in London, England to discuss the structure of a possible transaction involving the two companies. The GLG representatives expressed their desire to structure any possible transaction as a merger pursuant to which all holders of GLG stock would receive cash and shares of Man at a negotiated exchange ratio. Man representatives indicated their view that GLG’s proposed approach would not be viable because the Man Board would not approve a transaction that would require Man to register its shares in the U.S. and become subject to reporting requirements under U.S. federal securities laws, due to the significant costs and administrative effort required to comply with both the U.K. and U.S. regulatory regimes, given that Man is already subject to U.K. regulatory oversight and review. Man indicated it would be willing to issue shares in a transaction that was exempt from registration in the U.S. and to pay part of the aggregate consideration in cash. The Man representatives stated that in the case of a share exchange the premium to GLG stockholders would be modest whereas Man would be willing to pay a higher premium in a cash transaction. The Man representatives also indicated that in any transaction Man would require that the Individual Principals receive Man ordinary shares in exchange for their shares of GLG common stock and FA Sub 2 exchangeable shares in order to align the interests of the Individual Principals with Man’s shareholders and also would require that each Individual Principal agree to transfer restrictions on their Man ordinary shares, non-competition covenants and other provisions that would reflect a long-term commitment to, including by taking ongoing roles in, the combined business by the Individual Principals.

 

On March 9, 2010, the Man Board held a meeting at which there was a discussion of a potential transaction with GLG and a committee of the Man Board was established to further consider such a transaction. Perella Weinberg Partners, Man’s financial advisor, also gave a presentation to the Man Board regarding various financial analyses it had performed. See “— Financial Analyses of the Financial Advisor to Man” below.

 

On March 10, 2010, representatives of Chadbourne and Weil, Gotshal & Manges LLP, Man’s U.S. counsel, had a telephone call during which they discussed a transaction structure in which all GLG stockholders would receive a combination of cash and Man ordinary shares as consideration and an alternative bifurcated structure in which the Selling Stockholders would receive Man ordinary shares and the public stockholders of GLG other than the Selling Stockholders (which are referred to as the “unaffiliated stockholders”) would receive cash as consideration.

 

On March 11, 2010, Messrs. San Miguel, Rojek and Jones of GLG, Messrs. Ross, Singh, Oliver Stern, U.K. Legal Counsel of Man, and Robert Aitken, Head of Global Compliance of Man, and Ms. Orly Lax, Head of U.S. Legal & Product Legal of Man, and representatives of Chadbourne, Weil, Clifford Chance LLP, Man’s U.K. counsel, and Allen & Overy LLP, GLG’s U.K. regulatory counsel, met by teleconference to discuss whether a transaction could be structured in compliance with applicable law whereby the Principals would receive Man ordinary shares in exchange for their shares of GLG common stock and FA Sub 2 exchangeable shares in a transaction exempt from registration under U.S. securities laws, and the unaffiliated stockholders would receive cash in a merger. During the teleconference, the participants also discussed procedures that Chadbourne representatives indicated they believed would be advisable to protect the unaffiliated stockholders, if the parties pursued a transaction based upon such a structure, including establishing a special committee to negotiate any possible transaction and requiring that there be a nonwaivable condition in any merger agreement that holders of a majority of the outstanding shares of GLG common stock (other than the Selling Stockholders, Man, GLG and their respective affiliates (with certain exceptions) and employees of GLG) approve the merger. Clifford Chance had previously provided legal advice to GLG and its affiliates with respect to U.K. employment and partnership law matters, and GLG and Man waived conflicts with regard to Clifford Chance’s representation of Man in the transaction.

 

On March 15, 2010, representatives of Goldman Sachs and Perella Weinberg had an introductory teleconference with respect to a potential transaction between Man and GLG. Also on March 15, representatives of Goldman Sachs delivered a preliminary due diligence list on behalf of GLG to representatives of Perella Weinberg.

 

On March 17, 2010, representatives of Perella Weinberg delivered a preliminary due diligence list on behalf of Man to representatives of Goldman Sachs.

 

On March 18, 2010, Mr. San Miguel informed Mr. Ross by telephone that the GLG Board would not permit management to commence discussions with Man concerning a potential transaction until some indication of Man’s proposed valuation of GLG was made but would permit due diligence sufficient for Man to develop such an indication.

 

On March 19, 2010, representatives of Chadbourne and Weil had a telephone call during which they discussed the feasibility of a bifurcated transaction structure between Man and GLG and certain due diligence matters.

 

On March 22, 2010, Messrs. Clarke, Ross and Singh met with Messrs. Roman, Lagrange and Jones to discuss Man’s and GLG’s respective business, preliminary areas where synergies may be explored, possible forms of bifurcated deal structure and a high level approach to due diligence.

 

On March 23, 2010, Messrs. Roman, Lagrange, Clarke and Martin Franklin, a director of GLG who was in London on other business, had a meeting in London to make personal introduction between Messrs. Franklin and Clarke. The parties discussed Man’s and GLG’s respective businesses and that appropriate governance procedures to ensure fairness would be necessary if discussions were to proceed.

 

On March 24, 2010, representatives of Perella Weinberg and Goldman Sachs met to discuss process matters and potential transaction structures involving a share exchange and a merger. Goldman Sachs representatives communicated GLG’s expectations that there be a significant premium paid to GLG’s unaffiliated stockholders in any transaction.

 

Between March 16 and March 26, 2010, representatives and various advisors of GLG and Man conducted limited due diligence, and the legal advisors of Man and GLG held conference calls to discuss potential forms of bifurcated transaction structures. During this period, directors of GLG continued informal discussions among themselves regarding the advisability of pursuing a transaction with Man and on what terms such a transaction would be acceptable. The Individual Principals also communicated to other directors of GLG their expectation that if a bifurcated structure involving a share exchange and a cash merger were pursued, the unaffiliated stockholders receiving cash would receive a significant premium over GLG’s current share price, whereas the Individual Principals and any others who might receive Man ordinary shares would only receive a modest premium.

 

On March 26, 2010, representatives of Perella Weinberg notified representatives of Goldman Sachs that Bloomberg News had published an article about Man’s search for an acquisition target, noting that GLG was named as a potential target. Other news publications subsequently published similar articles. The GLG Board met by conference call to discuss the press articles and Man’s disclosure obligations arising as a consequence of such press

articles in the United Kingdom. Later that day and prior to the opening of trading in New York, GLG formally discontinued further discussions with Man. In making a decision to discontinue discussions, the GLG Board took into account the fact that discussions were in very preliminary stages and that Bank of America Merrill Lynch, Man’s U.K. listed company corporate broker, had informed GLG that the U.K. Listing Authority (“UKLA”) had taken the position that, in light of the media speculation, Man must publicly affirm if it continued to be in discussions with GLG. The GLG Board concluded that it had not reached sufficient consensus to consider pursuing a transaction and that discussions with Man were so preliminary that they did not warrant public disclosure to that effect. Between March 26 and March 28, 2010 Messrs. Clarke and Lagrange exchanged telephone messages before finally speaking by telephone about the discontinuation of discussions.

 

On March 29, 2010, the above-mentioned Man Board committee held a meeting in which they noted the discontinuation of both discussions with GLG and the preparatory work done in connection with a potential transaction.

 

In the month following the publication on March 26, 2010 of the various press articles speculating about a possible transaction between GLG and Man, GLG was contacted by several investment banking firms offering their services in connection with a potential transaction. No alternative potential bidders for GLG emerged during this time frame or subsequently.

 

On April 14, 2010, representatives of Goldman Sachs initiated a meeting with representatives of Perella Weinberg. At the meeting, the two firms reviewed the recently discontinued discussions between GLG and Man.

 

On April 26, 2010, the Man Board held a meeting at which Mr. Clarke was authorized to re-engage GLG with regards to a potential transaction and, in connection with a management presentation, Perella Weinberg discussed various financial analyses it performed with the Man Board (see “— Financial Analyses of the Financial Advisor to Man”). The Man Board determined that the structure should not require Man to register its shares in the U.S. and become subject to reporting requirements under U.S. federal securities laws, due to the significant costs and administrative effort required to comply with both the U.K. and U.S. regulatory regimes, as Man is already subject to U.K. regulatory oversight and review. The Man Board agreed that Bank of America Merrill Lynch should inform the UKLA at the appropriate time of Man’s re-engagement with GLG.

 

On April 26, Mr. Clarke called Mr. Lagrange to advise him that Man was still interested in a possible transaction with GLG and that he had received approval from the Man Board to seek to re-engage GLG in discussions regarding a possible transaction. Mr. Clarke indicated that Man would be prepared to present a written non-binding expression of interest that would have a bifurcated structure involving a share exchange with the Selling Stockholders for their shares of GLG common stock and FA Sub 2 exchangeable shares and a cash merger with the unaffiliated stockholders. He indicated that the Man Board had definitively determined it would not pursue any transaction that would require Man to register its shares in the U.S. Mr. Lagrange communicated this information to members of the GLG Board and members of GLG management who had been involved in the prior discussions with Man. The GLG Board members suggested to management that outside counsel to Man and GLG discuss the key terms of the proposed expression of interest letter before it was submitted and authorized management to request a written expression of interest if the legal advisors confirmed that the content was consistent with what had been generally described to Mr. Lagrange.

 

On April 27, 2010, representatives of Chadbourne and Weil held a teleconference during which Weil described the key terms of the expression of interest, the proposed structure and the rationale for the structure. The outside counsel then reported back to their respective clients and Mr. Lagrange notified Mr. Clarke that a written expression of interest could be sent by Man.

 

On April 28, 2010, Man submitted a letter signed by Kevin Hayes, Finance Director of Man, to GLG’s Chairman and Board indicating a non-binding expression of interest to negotiate a transaction or related transactions pursuant to which Man or one of its subsidiaries would propose to acquire 100% of GLG. The proposed structure involved two separate but related transactions each of which was conditioned on the other. For the first transaction, Man would negotiate an agreement with the Selling Stockholders pursuant to which the Selling Stockholders would be issued Man ordinary shares in exchange for their GLG securities. Man also proposed discussing with the Individual Principals at a later stage their continued involvement in the post-closing business and the associated incentive and retention/lock-up arrangements.

For the second transaction, Man proposed a merger agreement pursuant to which the unaffiliated stockholders of GLG would receive cash consideration for their shares of GLG common stock in a merger. Man’s letter indicated its expectation that if the parties pursued such a transaction, GLG would establish a special committee of independent directors to review and approve or reject the proposed transaction on behalf of GLG’s unaffiliated stockholders, and that such special committee would retain its own legal and financial advisors. Man indicated that it expected the transaction to be fully contingent on the unanimous approval of a special committee.

 

Man’s non-binding letter proposed to offer (a) an exchange of Man ordinary shares for the Principals’ shares of GLG common stock in connection with the share exchange at an exchange ratio representing a value of $3.40 per share of GLG common stock; and (b) cash to GLG’s unaffiliated stockholders in a cash merger on the basis of a $3.75 per share of GLG common stock. Man noted that its proposed price per share offer to GLG unaffiliated stockholders represented a premium of 40% over GLG’s closing stock price on March 25, 2010, which was one day prior to the beginning of media speculation about a transaction involving Man and GLG. Man proposed to pay the entire cash consideration in the cash merger from its available cash resources, and therefore, to include no financing contingency in the merger agreement.

 

Man also proposed a target date for entering into definitive agreements and announcing the transactions of no later than May 26, 2010 to coincide with the announcement of Man’s 2010 annual results.

 

In the afternoon of April 28, the GLG Board held a meeting by teleconference to review and discuss Man’s expression of interest. At the meeting, Mr. San Miguel provided an outline of Man’s letter to members of the GLG Board, highlighting the key terms of Man’s proposal. Mr. San Miguel noted that the expression of interest was non-binding and stated that Man proposed discussing with the Individual Principals at a later stage their continued involvement in the post-closing business and the associated incentive and retention/lock-up arrangements. Mr. San Miguel advised that the Individual Principals would not seek to negotiate their personal employment arrangements (which would be expected to have beneficial as well as restrictive terms for the Individual Principals) until the principal terms and conditions of any transaction had been established. The directors discussed the advisability of establishing a special committee, but each director indicated a desire to review and consider the expression of interest independently before further consideration by the GLG Board. The directors decided to meet on April 29, 2010 to have a more formal discussion of the expression of interest and to determine whether to establish a special committee of the GLG Board to consider whether or on what terms to pursue discussions with Man.

 

On April 29, 2010, Mr. Clarke called Mr. Lagrange to confirm that Mr. Lagrange had received the non-binding letter from Man.

 

On April 29, 2010, the GLG Board, with members of GLG’s senior management and representatives of Chadbourne present, met to discuss the letter submitted by Man. Mr. San Miguel presented a summary of the terms of the letter and provided background information relating to the letter. Mr. Rojek made a presentation regarding Man and its business based on materials prepared by Goldman Sachs. Representatives of Chadbourne made a presentation regarding the fiduciary duties of the directors under Delaware law. Mr. San Miguel disclosed potential client conflicts for legal advisers in connection with the possible transaction with Man. Mr. San Miguel indicated that Allen & Overy, which regularly provides GLG and its subsidiaries with U.K. law advice on matters unrelated to the potential transaction, was proposed to represent the Principals in connection with the possible transaction and to advise GLG on technical U.K. legal and regulatory matters relating to the potential transaction. He also reported that Chadbourne, which regularly represents GLG and its affiliated entities on various matters, was proposed to represent GLG in connection with the potential transaction. Mr. San Miguel also noted that Leslie J. Schreyer and Jeffrey A. Robins, each a partner of Chadbourne, were the trustees of the Gottesman GLG Trust and the Roman GLG Trust, respectively, and that Chadbourne represents other Principals from time to time. The GLG Board waived any conflicts of interest of Allen & Overy and Chadbourne as legal advisors to GLG in connection with the possible transaction arising out of their representation of, or roles within, some or all of the Principals.

 

Mr. San Miguel also reported that, although not formally engaged by GLG, Goldman Sachs had provided GLG’s management with assistance in evaluating Man and a possible transaction with Man and through that work was familiar with GLG and its business. He noted that while a special committee would be empowered to engage its own financial advisor, GLG would be interested in engaging its own financial advisor to assist GLG in connection with a potential transaction with Man, particularly with respect to diligence matters and delivery of a fairness opinion, and proposed engaging Goldman Sachs, subject to Goldman Sachs not otherwise having a conflict of interest, and subject to negotiation of acceptable terms of engagement.

 

At the April 29, 2010 meeting and, pursuant to ratification and approval at the May 16, 2010 meeting, the GLG Board established the special committee consisting of Ian Ashken, William Lauder and James Hauslein, each of whom is an independent director of GLG under New York Stock Exchange rules and each of whom affirmed that he was free of any material direct or indirect interest in, or relationship with, Man or its affiliates, the Principals or any other person or group which could be deemed to be controlling stockholders of GLG (and their affiliates), and did not expect to have any material interest in or involvement with (other than as a GLG Board member and holder of GLG securities) the possible transaction with Man. The GLG Board granted the special committee the authority to take the actions described in “— Fairness of the Merger and Recommendations of the Special Committee and the GLG Board — The Special Committee”, including broad powers to review, negotiate and recommend or reject the possible transaction or any alternative transaction. The GLG Board also granted the special committee the authority to select and retain its own financial advisor and legal counsel and such other consultants and agents to perform such other services as it may deem necessary, to obtain such opinions as the special committee may request and to determine whether to waive any conflicts relevant to the possible transaction or any other transaction. In addition, the GLG Board delegated to the special committee the right to waive the transfer restrictions under the terms of the Shareholders Agreement dated June 22, 2007 among the Selling Stockholders, other GLG stockholders party thereto and GLG (the “GLG Shareholders Agreement”), which waivers would be required in order to implement the transaction proposed by Man. See “Important Information Regarding the Principals — GLG Shareholders Agreement”. The GLG Board also authorized compensation and reimbursement for out-of-pocket expenses for members of the special committee. See “— Interests of Certain Persons in the Merger — Compensation Paid to Members of the Special Committee”.

 

In the early afternoon on April 30, 2010, Messrs. Ashken and Gottesman held a conference call with Mr. Clarke in which they informed him that the special committee had been formed and would meet later that day.

 

Later that same day, the special committee held a telephone conference with representatives of Winston & Strawn LLP present. Mr. Ashken was elected chair of the special committee. Mr. Ashken reported to the special committee that he had a conference call with Mr. Clarke earlier that day during which he informed Mr. Clarke that the special committee had been formed and would meet later that day. The special committee then engaged Winston as legal counsel to the special committee. Winston had on limited occasions in the past provided legal advice to an affiliate of Man, which the special committee determined did not impact Winston’s independence. After considering several candidates to serve as the special committee’s financial advisor and determining that some were conflicted, the special committee heard presentations from Citigroup and Moelis & Company LLC. The special committee then determined that Citigroup also was conflicted. Moelis had not previously performed services for GLG, the Principals or Man. The special committee considered the experience and credentials of Moelis in providing financial advice in similar situations and engaged Moelis as its financial advisor.

 

Also on April 30, representatives of Chadbourne and Weil had a telephone call in which Chadbourne advised Weil that Winston had been selected as counsel and Moelis had been selected as financial advisor to the special committee. Chadbourne and Weil also discussed matters relating to deal structure that should be addressed by the special committee, including deal protection.

 

Also on April 30, representatives of Goldman Sachs delivered to Messrs. San Miguel and Rojek presentation materials containing preliminary financial analyses, including implied transaction multiples and selected companies analyses and analysis at various prices.

 

On May 1, 2010, the special committee held a meeting by teleconference with Mr. San Miguel, Winston and Moelis. Mr. San Miguel reviewed the history between GLG and Man, and representatives of Winston reviewed with the members of the special committee their duties and responsibilities as members of the special committee and relevant process matters.

 

Mr. San Miguel then left the meeting, and the special committee and its advisors discussed strategies for evaluating and responding to Man’s letter. The special committee also discussed the advisability of requiring that the vote of a majority of the unaffiliated shares outstanding to approve any transaction with Man and considered other ways to ensure the fairness of a transaction to the unaffiliated stockholders. In particular, the special committee and its advisors discussed the possibility of negotiating a higher aggregate offer price from Man, the potential for all stock consideration or a mix of stock and cash consideration for the unaffiliated stockholders, an increase in the premium to be paid to the unaffiliated stockholders relative to the Selling Stockholders, and a share

price cap for the Selling Stockholders. The special committee and its advisors also discussed possible market checks of fairness of any offer from Man, including a broad pre-signing auction process, a selected approach to potential buyers pre-signing, a post-signing “go shop” period or a carefully structured set of exceptions to deal protection covenants that would enable the special committee to consider potential topping bids post-signing. The special committee did not make any decisions on these issues at its May 1 meeting.

 

In the afternoon of May 1, Messrs. Rojek and Jones and representatives of Goldman Sachs and Moelis had a conference call with representatives of Man, including Messrs. Rowsell, Hayes and Singh, and representatives of Perella Weinberg to discuss potential opportunities for synergies from the transaction and reiterate that there should be a significant premium paid to the GLG stockholders in the context of a transaction. Representatives of Moelis informed representatives of Perella Weinberg that the special committee has been considering, among other things, that GLG’s stock had historically traded in the mid-$4.00s per share range for a substantial period of time and had reached a 52-week high (including intra-day trading) of $4.61 per share and that the market price for shares of many financial institutions were trending upwards.

 

In the evening of May 1, Mr. Jones called representatives of Moelis to provide them with background on the proposed transaction, including an estimate range of cost synergies with a low case of approximately $40 million and a high case exceeding $50 million.

 

In the morning of May 2, 2010, Messrs. Rowsell, Hayes, Jones and Simon White, the Chief Operating Officer of GLG, and representatives of Goldman Sachs and Perella Weinberg held a meeting, which was joined by representatives of Moelis by conference call, during which they discussed preliminary possible cost synergy estimates, ranging from approximately $53.5 to $60.6 million, which were presented by GLG as a basis for discussion. In its May 17, 2010 press release announcing the potential transaction, Man estimated the annual potential cost savings to be approximately $50 million.

 

In the afternoon of May 2, Messrs. Rojek, Jones, Rowsell and Hayes had a conference call with representatives of Goldman Sachs, Moelis and Perella Weinberg regarding potential opportunities for revenue synergies. Representatives of GLG presented reasons for assigning a positive value to revenue synergies in evaluating the transaction, but representatives of Man expressed reservations as to such approach on the grounds that such synergies would be difficult to quantify for two companies with different compensation and pricing structures. The parties reached no understanding regarding revenue synergies that could be achieved in the transaction.

 

Also on May 2, the special committee had a meeting by teleconference with Winston and Moelis. Moelis representatives reported that GLG’s preliminary estimates of expense synergies discussed with GLG the day before indicated annual savings with a low case of approximately $40 million. The special committee also discussed that the Principals apparently had engaged in discussions with Man regarding a transaction potentially based on a “market-to-market” share exchange for the Principals that would include a modest premium over the GLG’s share price. Moelis and the special committee determined that the best strategy for receiving the highest value in any transaction would be to negotiate directly with Man for the highest price and best transaction reasonably available for the unaffiliated stockholders, rather than negotiating for an increase in the aggregate consideration to be paid by Man to the Selling Stockholders and unaffiliated stockholders.

 

On May 2, representatives of Chadbourne and Weil had a telephone call in which Chadbourne advised Weil that the special committee’s chair would be initiating direct dialogue with Man and that the special committee would be negotiating the structure and terms of any potential transaction.

 

In the afternoon of May 2, Mr. Ashken called Mr. Clarke to inform him that the special committee had elected Mr. Ashken as its chair and that the special committee had retained Moelis as its financial advisor and Winston as its legal advisor.

 

Throughout the first two weeks of May, the Individual Principals, representatives of each of GLG and Man including Messrs. San Miguel, Rojek, White, Jones, Rowsell, Hayes, Ross and Singh, and their various legal and financial advisors met in person and by telephone conference to discuss various due diligence and process matters.

 

On May 3, 2010, the GLG Board held a meeting for the purpose of reviewing GLG’s first quarter 2010 financial results. At the meeting, the directors also discussed the proposed transaction with Man and received a report from the special committee and discussed the high yield debt market conditions in considering alternatives for refinancing its existing debt, which management of GLG had been considering since February 2010.

The Man Board also held a meeting on May 3, in which the directors discussed deal valuation, due diligence and regulatory matters, and Perella Weinberg gave a presentation regarding various financial analyses it had performed. See “— Financial Analyses of the Financial Advisor to Man”.

 

Also on May 3, Mr. Ashken called Mr. Clarke to advise that GLG was not for sale and that the terms proposed by Man in its letter dated April 28, 2010, in particular the offer of $3.75 per share, were inadequate for the unaffiliated stockholders due to the fact that GLG common stock had traded as high as $4.61 per share in the past year. Mr. Ashken also informed Mr. Clarke that the special committee and its advisors would need between one to two weeks to fully evaluate whether GLG was prepared to enter into any strategic transaction as well as to complete its due diligence review. Mr. Ashken told Mr. Clarke that a transaction involving an exchange offer to all holders, not just the Selling Stockholders, was preferable from the special committee’s point of view and that if such a transaction was not feasible the special committee would be looking for a larger premium over market prices as well as in comparison to the price to be paid to the Selling Stockholders. Mr. Ashken indicated that in any potential transaction, the special committee would be seeking something in the range of $5.00 per share in cash. The special committee chose this amount as a beginning price for negotiations because this price provided a significant premium over the current GLG stock price and the special committee believed that a demand for a price above the $5.00 range could cause Man to withdraw its offer. Mr. Clarke responded by reiterating Man’s position that it was unwilling to offer its shares to all of GLG’s stockholders because doing so would require it to register its shares in the U.S., become subject to reporting requirements under U.S. federal securities laws, and consequently to incur the significant costs and administrative effort required to comply with both the U.K. and U.S. regulatory regimes. Mr. Clarke indicated that a price of $5.00 per share would not be justified based on Man’s valuation analyses. Mr. Clarke also indicated that the transaction would require a Man shareholder vote under the U.K. listing rules.

 

On May 4, 2010, Bank of America Merrill Lynch advised the UKLA that Man was considering a potential transaction with GLG.

 

On May 4, the Individual Principals and Mr. Clarke had a call to discuss communication strategies.

 

Also on May 4, representatives of Weil and Winston had a series of calls to discuss process matters and structuring considerations for any potential transaction, including deal protection.

 

On May 5, 2010, Mr. Roman advised the U.K. Financial Services Authority that GLG was considering a potential transaction with Man.

 

On May 5, Mr. San Miguel, representatives of Chadbourne and Messrs. Schreyer and Robins, acting in their capacities as trustees of the Gottesman GLG Trust and Roman GLG Trust, respectively, met with representatives of Allen & Overy to confirm Allen & Overy’s retention as counsel to the Principals.

 

On May 6, 2010, Mr. Aitken advised the U.K. Financial Services Authority that Man was considering a potential transaction with GLG.

 

In the morning of May 6, representatives of Weil circulated initial drafts of the merger agreement, the share exchange agreement and the voting and support agreement to legal counsel for the special committee, GLG and the Principals.

 

During the afternoon of May 6, the special committee held a meeting with Winston and Moelis at Moelis’s offices in New York. Representatives of Winston described the duties and responsibilities of the special committee throughout the process of considering and negotiating any transaction. Mr. Ashken reported to the special committee on his May 3, 2010 conversations with Mr. Clarke and informed the special committee that Man had begun its detailed due diligence review. Representatives of Moelis provided a preliminary update on their due diligence and valuation work, noting that the absence of a cash-flow analysis for both Man and GLG was not unusual for companies in the alternative asset management industry. The special committee and its advisors also discussed the “flash crash” that was occurring in the stock market during the course of their meeting.

 

The special committee and its advisors discussed various potential structures for a potential transaction and the implications of each of these structures, including possible strategies for achieving the best transaction reasonably available to GLG’s unaffiliated stockholders, whether from Man or another party. In particular, the special committee and its advisors discussed the possibility of conducting either a broad pre-signing auction process or a more select approach to potential buyers pre-signing. Based on discussions with management, the special committee recognized that with the environment then to date in 2010 of investors beginning to redeploy cash

into alternative investments, any rumored potential acquisition transaction or the announcement of an acquisition transaction involving GLG could result in significant postponement of both investments by new investors and/or additional investments by existing investors until the public had more visibility on the outcome of any potential transaction. In addition, the special committee members discussed the risk that certain GLG funds and managed accounts require only short periods of notice for redemptions and/or the key investment personnel could decide to serve notice to leave GLG at any time, as well as the risk that GLG’s proprietary investment strategies might be revealed to potential bidders during any due diligence process. As a result, the special committee concluded that any pre-signing market check process, whether broad or selective, that could lead to a disclosure of a potential change of control transaction before the terms of any such transaction had adequately been negotiated would create a substantial risk of postponements of new or additional investments in, or meaningful redemptions by investors from, GLG’s funds and managed accounts, a significant risk of the loss of key investment personnel, the potential risk that GLG’s investment strategies may be revealed or otherwise negatively impacted and a risk of losing the opportunity for a transaction with Man with no assurance of another opportunity for the unaffiliated stockholders to receive a premium comparable to that offered by Man. The special committee noted that although news of a potential transaction involving GLG and Man had been the subject of rumor and speculation in the press in March 2010, providing plenty of opportunities for other potential bidders to approach GLG, no inquiries or expressions of interest had been received other than inquiries from investment bankers offering to assist GLG in any potential transaction.

 

In consultation with its advisors, the special committee determined that, given the level of premium to the current GLG stock price that Man seemed willing to offer GLG’s unaffiliated stockholders, a focused process with Man that did not include a grant of exclusivity would be an appropriate path to pursue. The special committee discussed whether to request a “go-shop” provision in the merger agreement and determined that they did not believe a “go-shop” right would be likely to result in a superior transaction, given the economic and voting interest of the Selling Stockholders and the importance to any buyer of retaining the Individual Principals in an ongoing management role in GLG’s business. After consultation with its advisors, the special committee agreed that a flexible, fair merger agreement with target-favorable “fiduciary out” provisions would allow GLG’s unaffiliated stockholders to realize the benefits of an attractive premium transaction while allowing GLG to consider superior unsolicited third-party proposals. After a discussion, the special committee authorized Moelis to continue its valuation and due diligence activities and to pursue a potential strategic transaction with Man on the terms and using the approach discussed in the meeting, with goals of both achieving a higher offer price from Man and a higher premium to be paid to the unaffiliated stockholders relative to the price to be received by the Selling Stockholders.

 

The special committee also discussed Winston’s comments to the drafts of the merger agreement, the share exchange agreement and the voting and support agreement.

 

On May 10, 2010, the special committee held a meeting with Winston and Moelis at Winston’s New York offices. The special committee and its advisors discussed the recent decline of GLG’s stock price as well as the recent dramatic declines in the stock markets and the impact such declines might have on a potential transaction, including the possibility that Man could decide to withdraw or reduce its original proposal.

 

The special committee instructed the Moelis representatives to request from Man and its financial advisor any and all information that could yield better insight into the intrinsic value of Man’s ordinary shares and to assist the special committee in analyzing such information.

 

The special committee also reviewed current drafts of the transaction agreements with representatives of Winston and held a general discussion regarding certain regulatory matters that Man focused on in their due diligence review.

 

After the special committee meeting ended, the GLG Board held a meeting by teleconference with Messrs. San Miguel and Rojek and representatives of Winston and Chadbourne for the purpose of receiving an update on the status of the special committee’s negotiations.

 

Also on May 10, representatives of Winston circulated the combined comments of Winston, Chadbourne and Allen & Overy on the initial draft of the merger agreement.

 

On May 11, 2010, representatives of Allen & Overy circulated the combined comments of Allen & Overy, Winston and Chadbourne to the initial drafts of the share exchange agreement and the voting and support

agreement. Representatives of Weil and Winston also had a telephone call to discuss deal protection mechanisms and the approach on the fairness opinions.

 

Also on May 11, Messrs. San Miguel and Rojek and representatives of Chadbourne, Winston, and Allen & Overy met by teleconference. The legal advisors collectively concluded that because the merger agreement, on the one hand, and the share exchange agreement and voting and support agreement, on the other hand, each have closing conditions that require that the other agreements’ closing conditions have been satisfied and a number of other terms that are inextricably linked to each other, counsel to the special committee, GLG and the Principals would all participate in key teleconferences and meetings with counsel to Man to negotiate key points in each agreement on behalf of their respective clients and constituencies.

 

On May 12, 2010, the Individual Principals and Mr. Clarke had a call to discuss outstanding commercial points relating to closing conditions and restrictive covenants that impact the Individual Principals, as well as retention and severance arrangements for key GLG employees, other than the Individual Principals, whose services would be needed either to complete the transaction or for purposes of GLG’s business post-closing.

 

Mr. Ashken (representing the special committee) and Mr. Roman (representing the Principals) and Messrs. Clarke and Singh of Man also met in person in London on May 12 to discuss the status and terms of the proposed transaction generally. During the course of the discussion, the treatment of the outstanding warrants to purchase GLG common stock was discussed. Mr. Ashken told Mr. Clarke that based on the contractual terms of the warrants and the fact that they were significantly out-of-the-money, the special committee’s intention was to value them at zero, with the understanding that Man may decide in its discretion to make an offer to purchase the warrants. The parties discussed the fact that there were some potential issues with having the warrants remain outstanding after the merger, such as the potential of the surviving corporation remaining subject to continued SEC reporting obligations after the merger, the administrative burdens and expense of administering the warrants that remain outstanding, and the potential for nuisance claims from warrant holders whose warrants would be permanently out-of-the-money after the merger. Mr. Ashken also discussed proposed severance and retention arrangements for key GLG personnel whose services it was important to retain through closing. Mr. Ashken stated his understanding that the value of any such arrangements would be consistent with industry practice and would not be material to the overall size of any transaction. Mr. Ashken also asked Mr. Clarke to have Man’s representatives review matters relating to the warrants and severance and retention arrangements with the advisors to the special committee and GLG.

 

On May 12, Messrs. San Miguel, Rojek, Singh and representatives of Weil, Winston, Chadbourne, Allen & Overy and Clifford Chance had a series of calls to discuss the draft transaction agreements, Man’s shareholder circular and various due diligence matters.

 

Also on May 12, Miriam McKay, Head of Investor Relations for Man, and Andy Knox of Man had an initial meeting at Perella Weinberg’s London office with Messrs. Roman, Jones and David Waller, Head of Communications for GLG, to discuss the investor presentation to be distributed in connection with any announcement of the proposed transaction. They met thereafter to further refine the presentation.

 

On May 13, 2010, the special committee met by teleconference with representatives of Winston and Moelis. Mr. Ashken reported on his meeting with Mr. Clarke the previous day. The special committee discussed Man’s positions and, in particular, the conditions to closing proposed by Man and other items that might adversely affect the certainty of the closing of the transactions.

 

Later that day, the GLG Board held a meeting by teleconference with representatives of Winston for the purpose of receiving an update on the status of the special committee’s negotiations.

 

Also on May 13, the Man Board held a meeting in which it reviewed the due diligence exercise carried out in relation to GLG, received a presentation by Perella Weinberg regarding various financial analyses it had performed (see “— Financial Analyses of the Financial Advisor to Man”) and approved the transaction with GLG subject to final negotiations. The Man Board then appointed a new committee consisting of Jon Aisbitt, Chairman of the Man Board, and Mr. Clarke, who were authorized to finalize and execute the transaction documents, subject to reaching agreement on the consideration to be paid and satisfactory review of a number of due diligence and other issues.

 

On May 13, Michael Robinson, Head of Global Human Resources for Man, and Claire Morland, Head of Compensation and Benefits for Man, had a conference call with Messrs. San Miguel and Schreyer to discuss a

proposal by GLG’s management regarding severance and retention arrangements for GLG’s key personnel other than the Individual Principals.

 

On May 14, 2010, Messrs. Ashken and Clarke spoke by telephone to discuss the status of negotiations and the feedback Mr. Clarke had received from the Man Board on the primary open transaction terms.

 

Mr. Clarke told Mr. Ashken that Man was prepared to offer $4.50 per share in cash in the merger and that this was the most Man was willing to pay. Mr. Clarke also indicated that such price was subject to Man’s ability to reach an agreement with each Individual Principal on the share exchange agreement at the levels it anticipated. Mr. Clarke said that Man was still negotiating with the Individual Principals. Mr. Ashken said that this price was below what he was hoping for and that ideally the price would be above GLG’s 52-week intra-day high stock price of $4.61 per share. Mr. Clarke reported to Mr. Ashken that there would be no movement in price. Mr. Ashken noted that the special committee would discuss the proposal and that any proposal would require the approval of the special committee. Messrs. Ashken and Clarke also discussed the potential use of a cap and floor on the consideration to be received by the Selling Stockholders. Mr. Ashken indicated that a cap on the consideration received by the Selling Stockholders would be important in order to protect the interests of the unaffiliated stockholders.

 

In the afternoon of May 14, the special committee held a meeting by teleconference with representatives of Winston and Moelis. The special committee discussed requesting that a cap on the consideration received by the Selling Stockholders be established (without a floor) to maintain the premium being received by the unaffiliated stockholders compared to the consideration to be paid to the Selling Stockholders. Moelis also discussed with the special committee the offer price of $4.50 in comparison to the current stock price of GLG, the recent declines in the markets generally and other factors. The special committee concluded that it would seek to obtain a price of $4.61 per share (being the 52-week intra-day high price of GLG common stock).

 

The special committee then discussed the treatment of the GLG warrants. Mr. Ashken reported that Man was considering offering a nominal amount for the warrants, but had not finally determined whether they would do this, and if they did at what valuation level. The special committee asked Moelis to contact Perella Weinberg to determine Man’s proposal for treatment of the warrants. Moelis and Winston both reported on their work in reviewing, analyzing and negotiating the transaction agreements and other materials.

 

The special committee discussed severance and retention arrangements for key personnel and agreed that any such arrangements must not affect the price paid to the unaffiliated stockholders. The special committee agreed that Mr. Ashken would request final proposals from GLG’s senior management including the Individual Principals to ensure that the special committee had sufficient time to evaluate such proposals prior to considering any overall transaction.

 

Also on May 14, the Individual Principals and Messrs. Jones, Waller, Aisbitt, Clarke, Hayes and Browne and Ms. McKay, and representatives of Perella Weinberg and Bank of America Merrill Lynch attended a rehearsal for the investor meeting. Also on May 14, after prior conversations, Mr. Clarke met with Messrs. Gottesman and Roman and agreed to core retention and alignment arrangements for the Individual Principals and Mr. Clarke proposed that the Principals would receive an implied value of $3.50 per share of GLG common stock in the proposed share exchange transaction, subject to a cap but without a floor, provided that the special committee accepted $4.50 per share of GLG common stock as the price in the merger. Messrs. Gottesman and Roman agreed to the proposal for the Selling Stockholders to receive Man ordinary shares with a value of $3.50 per share of GLG common stock in the share exchange.

 

On May 14, Ms. Morland had a telephone call with Mr. Rojek to discuss further GLG’s proposal regarding retention and severance arrangements for GLG’s key personnel other than the Individual Principals and to clarify the calculation of the amounts payable under the arrangements.

 

Also on May 14, Clifford Chance circulated initial drafts of the proposed employment agreements and service contracts between affiliates of Man and each of the Individual Principals, including non-competition agreements and share lock-up agreements. Weil circulated revised drafts of the merger agreement, the share exchange agreement and the voting and support agreement. Later that day, legal counsel for all the parties had an all-hands lawyers’ teleconference to discuss key open points in the transaction agreements. Subsequently, Winston circulated the combined comments of Allen & Overy, Winston and Chadbourne to the draft of the merger agreement

circulated by Weil earlier that day. Allen & Overy circulated the combined comments of Allen & Overy, Winston and Chadbourne to drafts of the share exchange agreement and the voting and support agreement.

 

Later on May 14, Mr. Gottesman and Mr. Clarke had a telephone call following the clarifications discussed between management of Man and GLG, to discuss GLG’s proposal regarding retention and severance arrangements for GLG’s key personnel other than the Individual Principals and Mr. Clarke did not object to the proposed arrangements.

 

On May 14, in advance of the special committee and compensation committee meetings scheduled for May 16, 2010, Chadbourne sent to Winston for circulation to the special committee, materials summarizing the proposed retention and severance arrangements for GLG’s key personnel other than the Individual Principals.

 

On May 15, 2010, after discussion about the retention and severance arrangements for GLG’s key personnel other than the Individual Principals, Mr. Clarke confirmed to Mr. Ashken that Man was still prepared to continue to proceed with a transaction in which the unaffiliated stockholders would receive $4.50 in cash per share of GLG common stock, which Man had previously indicated was the maximum amount it was prepared to pay.

 

On May 15 and 16, 2010, legal counsel for Man, GLG, the special committee and the Principals had several teleconference calls to continue negotiations on the merger agreement, the share exchange agreement and the voting and support agreement.

 

In the morning of May 16, 2010, Messrs. Ashken and Clarke had a telephone call in which Mr. Ashken asked Mr. Clarke to raise Man’s offer price for the unaffiliated stockholders from $4.50 per share to $4.61 per share. Mr. Clarke reiterated that $4.50 was the maximum Man was willing to offer the unaffiliated stockholders and noted that this was a premium of approximately 55% over GLG’s closing stock price on Friday, May 14, 2010. After continued effort to elevate the price, Mr. Ashken finally told Mr. Clarke that he would accept the $4.50 per share cash proposal, subject to unanimous approval of the special committee and the GLG Board, receipt by the special committee and the GLG Board of fairness opinions from Moelis and Goldman Sachs, respectively and satisfactory resolution of all open contractual matters.

 

Also on May 16, Mr. Ashken requested that Mr. Clarke agree to reduce the termination fee to 2.5% of the total transaction value based on the special committee’s sensitivity to the lack of a go-shop provision.

 

Later in the morning of May 16, the special committee held a telephone meeting with representatives of Winston, Moelis, Chadbourne and Messrs. San Miguel and Rojek. Mr. Ashken reported on his call that day with Mr. Clarke. Winston and Chadbourne reported on the status of negotiations of the agreements. Mr. San Miguel reported on the status of negotiation of the representations, warranties and covenants to be made by GLG as part of the transaction. Mr. San Miguel also discussed his understanding of the status of employment arrangements for the Individual Principals. Mr. San Miguel stated that each Individual Principal would be receiving the same level of compensation from Man as they presently do from GLG, and also would be agreeing to three-year non-competition agreements, lock-ups of Man ordinary shares received in the transaction and requirements that they maintain personal investments in funds or accounts managed by GLG of no less than a certain aggregate amount.

 

Representatives of Winston and Chadbourne provided a summary of the terms of the proposed transaction with Man as negotiated to date. The special committee discussed the principal economic terms of the transaction. Mr. San Miguel then explained GLG’s approach to retaining its key portfolio managers. Representatives of Chadbourne made a presentation regarding proposed retention and severance arrangements for GLG management other than the Individual Principals. Messrs. San Miguel and Rojek left the meeting and James Reda of James F. Reda & Associates, LLC, independent compensation consultants retained by GLG, joined the meeting. Mr. Reda presented his analysis of the proposed compensation agreements for Messrs. San Miguel, Rojek and Schreyer. Mr. Reda said that in his opinion, the proposed arrangements with Messrs. San Miguel, Rojek and Schreyer were reasonable and within market practice. After Mr. Reda’s presentation, the special committee and its advisors discussed these issues, the directors’ restricted stock awards and other employment arrangements. Then, Mr. Reda and representatives of Chadbourne left the meeting.

 

Moelis representatives presented their financial analyses regarding the fairness to the unaffiliated stockholders of the consideration to be received in the merger by such stockholders, and the special committee discussed the same. After discussion, representatives of Moelis delivered to the special committee an oral opinion, subsequently confirmed by delivery of a written opinion dated May 16, 2010 that, as of May 16, 2010 and based upon and subject

to the limitations and qualifications set forth therein, the consideration of $4.50 per share in cash to be received by the GLG stockholders (other than the Selling Stockholders) in the merger was fair from a financial point of view to such holders other than the Selling Stockholders. The full text of the written opinion of Moelis dated May 16, 2010 is attached as Appendix D to this proxy statement. The written opinion of Moelis sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the reviews undertaken in connection with rendering the opinion. See “— Opinion of Moelis & Company LLC”.

 

The special committee then had a discussion with the Moelis representatives regarding the value of Man’s ordinary shares. The special committee was concerned that there might be intrinsic value in the Man ordinary shares that was not reflected in their market price, or in any proposed economic arrangements between Man Group and the Principals, that may effectively increase the value of the consideration paid to the Selling Stockholders. The Moelis representatives, at the request of the special committee, had held discussions with Mr. Hayes and representatives of Perella Weinberg and reported back to the special committee that such discussions did not reveal material economic value for Man that was not reflected in publicly available information. The Moelis representatives said that intrinsic value could arise at some point in the future from AHL, Man’s managed futures funds, but noted that certain of those funds were presently below their high water mark. At the request of the special committee, representatives of Moelis submitted a supplemental written presentation to the special committee regarding Man based on such publicly available information.

 

The special committee then considered and discussed a number of factors relating to the proposed transaction, which are described in “— Fairness of the Merger and Recommendations of the Special Committee and the GLG Board — The Special Committee”.

 

The special committee then unanimously:

 

(1) determined that (i) it is in the best interests of GLG and its unaffiliated stockholders for GLG to enter into the merger agreement, and (ii) the transactions contemplated by the merger agreement, including the merger, the share exchange agreement and the voting and support agreement, are advisable and fair to GLG and its unaffiliated stockholders;

 

(2) approved the waiver of the restrictions on transfer applicable to shares of capital stock of GLG held by the Selling Stockholders under the GLG Shareholders Agreement; and

 

(3) recommended that the GLG Board (i) determine it is in the best interests of GLG and its stockholders for GLG to enter into the merger agreement, (ii) authorize and approve the execution, delivery and performance by GLG of the merger agreement (subject to Minority Stockholder Approval), (iii) waive the restrictions on transfer applicable to shares of GLG capital stock held by the Selling Stockholders under the GLG Shareholders Agreement, as requested by the Selling Stockholders, (iv) approve the share exchange agreement and the consummation of the transactions contemplated thereby, (v) submit the adoption of the merger agreement to a vote at a special meeting of GLG stockholders called for that purpose, and (vi) recommend that stockholders of GLG vote to adopt the merger agreement at the special meeting.

 

In the afternoon of May 16, a meeting of the GLG Board was held by teleconference with all directors present. Messrs. San Miguel and Rojek and representatives of Winston and Chadbourne also attended the meeting. Chadbourne representatives reviewed with the directors their fiduciary duties. Representatives of Winston and Chadbourne provided a summary of the terms of the transaction, including a discussion of the covenants, conditions precedent and termination fees (up to $48 million) and remaining negotiating points. Representatives of Winston reported on the special committee meeting that had taken place earlier that day in which the special committee approved the transaction subject to the caveat that the transaction be subject to Minority Stockholder Approval.

 

The GLG Board discussed the issue of the GLG warrants, and concluded they would like all outstanding issues relating to the warrants to be resolved by the time of execution of the merger agreement.

 

Representatives of Goldman Sachs joined the meeting. Goldman Sachs gave a financial presentation previously distributed to members of the GLG Board describing, among other things, the aggregate consideration of the transactions contemplated by the share exchange agreement and merger agreement. Thereafter, representatives of Goldman Sachs delivered its oral opinion, which was subsequently confirmed in writing, to the GLG Board that, as of May 17, 2010 and based upon and subject to the assumptions made in its written opinion, the Aggregate Consideration (as defined below) to be paid to the holders (other than Man and its

affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes pursuant to the share exchange agreement and merger agreement was fair from a financial point of view to such holders. The full text of the written opinion of Goldman Sachs dated May 17, 2010 is attached as Appendix E to this proxy statement. The written opinion of Goldman Sachs sets forth, among other things, the assumptions made, procedures followed, matters considered and limitations on the reviews undertaken in connection with rendering the opinion. See “— Opinion of Goldman Sachs International”.

 

The GLG Board then considered and discussed a number of factors relating to the proposed transaction, which are described in “— Fairness of the Merger and Recommendations of the Special Committee and the GLG Board — The GLG Board”.

 

The GLG Board then unanimously:

 

(1) determined that the merger agreement and the transactions contemplated thereby are advisable and fair to and in the best interests of, GLG and its stockholders;

 

(2) authorized and approved the execution, delivery and performance by GLG of the merger agreement (subject to the Minority Stockholder Approval);

 

(3) approved the waiver of all the restrictions on transfer applicable to shares of GLG capital stock held by the Selling Stockholders under the GLG Shareholders Agreement, as requested by the Selling Stockholders;

 

(4) approved the share exchange agreement and the consummation of the transactions contemplated thereby;

 

(5) determined to submit the adoption of the merger agreement to a vote at a special meeting of stockholders called for that purpose; and

 

(6) recommended that stockholders of GLG vote to adopt the merger agreement at the special meeting of stockholders.

 

Immediately following the GLG Board meeting, a GLG Compensation Committee meeting was held at which the employment and severance arrangements for key personnel presented earlier in the day to the special committee were approved. See “— Interests of Certain Persons in the Merger — Amendments to Certain Employment Agreements with GLG”.

 

Also on May 16, the Man Board committee comprised of Messrs. Aisbitt and Clarke held a meeting to discuss the terms of the transaction, the directors’ fiduciary duties and the termination fee. The Man Board committee then approved the transaction and confirmed the satisfaction of the outstanding due diligence and other issues.

 

After the Man Board committee meeting, Man requested that GLG agree to make a tender offer to purchase all outstanding GLG warrants at a purchase price equal to the closing price of GLG’s publicly traded warrants on the last trading day prior to the signing of the merger agreement ($0.129 per warrant on May 14, 2010) at or prior to the merger of GLG and Man, subject to completion of the merger. Man indicated it would agree to ensure that at the effective time of the merger, GLG as the surviving corporation, would have all funds necessary in connection with the warrant tender offer and to reimburse GLG for reasonable out-of-pocket costs incurred by GLG and its subsidiaries in connection with the warrant tender offer and to indemnify GLG and its subsidiaries from claims, losses and damages suffered or incurred in connection with the tender offer. GLG agreed to Man’s request. The parties also agreed to reciprocal termination fees of $48 million (subsequently reduced to $26 million) payable in certain circumstances.

 

Early in the morning of May 17, 2010, all terms of the transaction documents were finalized and the parties entered into the merger agreement, the share exchange agreement and the voting and support agreement. See “The Merger Agreement”, “Descriptions of Other Transaction Agreements — Share Exchange Agreement” and “Descriptions of Other Transaction Agreements — Voting and Support Agreement”.

 

Later on May 17, Man issued a press release announcing the transaction and held a meeting for investors and a meeting for analysts in which the Individual Principals participated. GLG subsequently issued a press release announcing the transaction and providing a brief summary of the terms of the transaction on the same day.

 

On May 24, 2010, Ron Duva, a stockholder of GLG, filed a putative class action complaint in the Court of Chancery of the State of Delaware (the “Delaware Court”) on behalf of himself and all other similarly situated

stockholders of GLG, captioned Duva v. GLG Partners, Inc., et al. (the “Delaware Action”). The second amended complaint, filed on July 8, 2010, alleges that the defendants in the Delaware Action breached their fair price, fair process, disclosure and other fiduciary duties to GLG’s stockholders in connection with the transactions contemplated by the Merger Proposal and/or aided and abetted in such breaches of fiduciary duty. The Delaware Action seeks, among other things, an injunction enjoining the transactions contemplated in the Merger Proposal and to rescind any transactions contemplated by the Merger Proposal that may be consummated. On May 27, 2010, discovery commenced in the Delaware Action. On June 29, 2010, the Delaware Court entered an order certifying a plaintiff class of GLG stockholders. On July 2, 2010, the Delaware Court entered a scheduling order providing for a hearing on the plaintiff’s motion to enjoin consummation of the merger on September 3, 2010.

 

On May 24, 2010, Akoleo S.A., a purported stockholder of GLG, filed a putative class action complaint in New York Supreme Court (the “New York Court”) on behalf of itself and all other similarly situated stockholders of GLG, captioned Akoleo S.A. v. GLG Partners, Inc., et al. (the “Akoleo Action”). On May 24, 2010, Tanweer Zia, a purported stockholder of GLG, filed a putative class action complaint in New York Court on behalf of himself and all other similarly situated stockholders of GLG, captioned Zia v. GLG Partners, Inc., et al. (the “Zia Action” and, together with the Akoleo Action, the “New York Actions”). The complaints filed in each of the New York Actions alleges that the defendants in the New York Actions breached their fair price, fair process, disclosure and other fiduciary duties to GLG’s stockholders in connection with the transactions contemplated by the Merger Proposal. On June 28, 2010, the defendants to the New York Actions moved to dismiss, or, in the alternative, to stay, each of the New York Actions. On July 7, 2010, the parties to the New York Actions entered into, and the New York Court ordered, a stipulation staying all proceedings in the New York Actions pending resolution of the Delaware Action.

 

On August 19, 2010, Man, GLG and GLG’s directors (collectively, the “Defendants”), as defendants in the Delaware Action, and the Defendants (other than Man), as defendants in the New York Actions, reached an agreement in principle with the plaintiffs in the Delaware Action and the New York Actions providing for the settlement of the Delaware Action and the New York Actions on the terms and subject to the conditions set forth in the memorandum of understanding dated August 19, 2010 (the “MOU”), which terms include, but are not limited to, an obligation by GLG to make certain additional disclosures in this proxy statement and an obligation by Man, Merger Sub and GLG to amend the merger agreement to (a) reduce each of the Company Termination Fee and the Parent Termination Fee (each, as defined in the merger agreement) from $48 million to $26 million; (b) reduce the period following a termination of the merger agreement under certain circumstances during which the Company Termination Fee (as defined in the merger agreement) is payable from within twelve (12) months to within nine (9) months; and (c) reduce the period of time in which Man may amend the terms of the merger agreement so that a Superior Proposal (as defined in the merger agreement) is no longer superior from three (3) business days to two (2) business days; provided that solely for the purposes of such two business day time period, a U.K. bank holiday will not be deemed a business day. The settlement is subject to the execution of definitive settlement documentation and the approval of the Delaware Court. Upon effectiveness of the settlement, all claims which were or could have been asserted in the Delaware Action or the New York Actions will be fully and completely discharged and dismissed with prejudice.

 

Also on August 19, Man, Merger Sub and GLG entered into an amendment to the merger agreement (the “Amendment”) to effectuate the amendments contemplated in the MOU described above. Except as otherwise specifically amended in the Amendment, the merger agreement, as modified by the Amendment, remains in full force and effect. A copy of the Amendment is attached as Appendix A-1 to this proxy statement.

 

On June 21, 2010, Sage Summit LP entered into an unconditional rescindable purchase agreement with Ogier Fiduciary Services (Cayman) Limited, acting solely in its capacity as trustee of the Blue Hill Trust, and Lavender Heights Capital LP entered into an unconditional rescindable purchase agreement with Ogier Fiduciary Services (Cayman) Limited, acting solely in its capacity as trustee of the Green Hill Trust (collectively, the “Purchase Agreements”). Under the Purchase Agreements, Sage Summit LP and Lavender Heights Capital LP (collectively, the “LPs”) each sold its entire holding of 8,460,854 shares and 5,640,570 shares of GLG common stock, respectively, to the Blue Hill Trust and the Green Hill Trust (collectively, the “Remainder Trusts”), respectively, in exchange for a deferred payment obligation, payable in installments on specified dates of delivery of (A) (i) ordinary shares of Man received by the Remainder Trusts in exchange for the GLG shares under the share exchange agreement or (ii) in lieu of all or a portion of the ordinary shares of Man described in

clause (i) above, an amount in cash equal to the net proceeds from the sale of ordinary shares of Man not otherwise being delivered pursuant to the terms of clause (i), in ordinary sales transactions on the London Stock Exchange, together with (B) an amount in cash equal to the cumulative value of all dividends, distributions and other income distributed by Man in respect of the notional number of ordinary shares of Man delivered by the Remainder Trusts to the LPs; provided, however, that the installment dates and share amounts set forth in the Purchase Agreements may be adjusted to the extent that forfeitures and/or reallocations of membership interests held by certain members of the LPs occur after the date of the Purchase Agreements in accordance with the terms of the LPs’ limited partnership agreements, as applicable. The LPs each have the right to rescind their respective Purchase Agreements with the respective Remainder Trusts and reacquire the shares prior to completion of the merger (or such other date as agreed). By virtue of the Joinder Agreement dated as of June 21, 2010 by and among Man, Merger Sub, GLG, the LPs and Ogier Fiduciary Services (Cayman) Limited, in its capacity as trustee of each of the Remainder Trusts, joined as a party to the share exchange agreement and the voting and support agreement and agreed to perform the obligations of the LPs thereunder. The Joinder Agreement is attached as Appendix I to this proxy statement.

 

The Special Committee

 

On April 29, 2010, the GLG Board formed a special committee consisting solely of independent directors. The GLG Board delegated to the special committee the authority, among other things, to:

 

 

On May 16, 2010, the special committee, after discussion and consideration of the terms of the merger agreement, the share exchange agreement and the voting and support agreement, and in each case the transactions contemplated thereby, and following the receipt of a presentation from Moelis, and Moelis’s oral opinion subsequently confirmed by delivery of a written opinion dated May 16, 2010 that, as of May 16, 2010 and based upon and subject to the limitations and qualifications set forth therein, the consideration of $4.50 per share in cash to be received by the GLG stockholders (other than the Selling Stockholders) in the merger was fair from a financial point of view to such holders other than the Selling Stockholders, unanimously:

 

 

 

 

In the course of reaching the determination and making the recommendations described above, the special committee considered and discussed a number of factors as generally positive or favorable, including, but not limited to, the following:

 

 

 

 

 

 

 

 

 

 

 

 

In the course of reaching the determinations and making the recommendations described above, the special committee considered a number of factors to be generally negative or unfavorable, including, but not limited to, the following:

 

 

 

In the course of reaching the determinations and decisions, and making the recommendations, described above, the special committee considered the following factors relating to the procedural safeguards that the special committee believes were present to ensure the fairness of the merger and to permit the special committee to represent the interests of the GLG stockholders (other than the Selling Stockholder), each of which the special committee believes supports its decision and provides assurance of the fairness of the merger to us and such stockholders:

 

 

 

In evaluating whether to pursue a transaction with Man or any strategic alternatives, including continuing to execute GLG’s business plan as a standalone company, the special committee considered the fact that under the Voting Agreement entered into in 2007 (as described under “Important Information Regarding the Principals — Voting Agreement”), the Selling Stockholders and their affiliates are able to determine the outcome of most matters requiring stockholder approval (other than those requiring a super-majority vote and other than matters for which they agreed that the unaffiliated stockholders may have a separate vote) and, as a result, without some form of minority voting protection, the Selling Stockholders could cause or prevent a change of control of GLG, possibly depriving the unaffiliated stockholders of an opportunity to receive a premium for their shares as part of a sale of GLG. The special committee further considered the fact that the GLG board of directors had delegated to the special committee broad powers to review, negotiate and recommend or reject a possible transaction with Man or any alternative transaction, which, taken together with a separate majority-of-the-minority voting requirement, would, in the special committee’s judgment, remove to the greatest extent possible the Selling Stockholders’ potentially conflicted influence and control over a potential transaction with Man.

 

In evaluating Man’s demand for a voting and support agreement of the type ultimately negotiated with the Selling Stockholders, the special committee considered the protective effects of the delegation of board authority and the minority voting requirement described above, together with the fact that:

 

 

In analyzing the merger relative to our going concern value, the special committee adopted the analysis and the opinion of Moelis. The special committee did not consider liquidation value as a factor because GLG is a viable going concern business and the trading history of GLG common stock is an indication of its value as such. In addition, due to the fact that GLG is being sold as a going concern and that its most valuable assets are its investment

professionals, the special committee did not consider GLG’s liquidation value relevant in its deliberations. Further, the special committee did not consider net book value a material indicator of GLG’s value because such a valuation metric is generally not meaningful for asset management firms, which are typically valued based on assets under management and future earnings potential. The net book value of GLG is merely indicative of historical costs and as of March 31, 2010 represented a negative value.

 

The foregoing discussion of information and factors considered and given weight by the special committee is not intended to be exhaustive, but is believed to include substantially all of the material factors, both positive and negative, considered by the special committee. In view of the variety of factors considered in connection with its evaluation of the merger agreement and the merger, the special committee did not find it practicable to, and did not, quantify or otherwise assign relative weights to the specific factors considered in reaching its determination and recommendation. In addition, individual special committee members may have given different weights to factors. The special committee’s recommendations were based upon the totality of the information presented to and considered by it. The special committee conducted extensive discussions of, among other things, the factors described above, including asking questions of our management and the special committee’s financial and legal advisors.

 

The GLG Board

 

On May 16, 2010, the GLG Board, after receiving the oral opinion of its financial advisor Goldman Sachs, which was subsequently confirmed in writing, that, as of May 17, 2010 and based upon and subject to the factors and assumptions set forth therein, the Aggregate Consideration (defined below) to be paid to the holders (other than Man and its affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes pursuant to the share exchange agreement and merger agreement was fair from a financial point of view to such holders, and acting upon the unanimous recommendation of the special committee, unanimously:

 

 

In the course of reaching the determination and making the recommendations described above, the GLG Board considered and discussed and adopted the following material factors:

 

 

On May 16, 2010, at a meeting of the special committee held to evaluate the transaction, Moelis delivered to the special committee an oral opinion, subsequently confirmed by delivery of a written opinion dated May 16, 2010

to the effect that, based upon and subject to the limitations and qualifications set forth in the written opinion, as of the date of the opinion the consideration of $4.50 per share in cash to be received by the stockholders of GLG (other than the Selling Stockholders) in the merger was fair from a financial point of view to such stockholders.

 

The full text of the Moelis opinion describes the assumptions made, procedures followed, matters considered and limitations on the review undertaken by Moelis. The opinion is attached as Appendix D to this proxy statement and is incorporated into this proxy statement by reference. GLG’s stockholders are encouraged to read this opinion carefully in its entirety.

 

Moelis’s opinion does not address GLG’s underlying business decision to effect the merger or the relative merits of the merger as compared to any alternative business strategies or transactions that might be available to GLG and does not constitute a recommendation to any stockholder of GLG as to how such stockholder should vote with respect to the merger or any other matter.

 

At the direction of the special committee, Moelis was not asked to, nor did it, offer any opinion as to (i) the material terms of the merger agreement or the form of the merger or any other contractual arrangement that the parties may enter into in connection with the merger or (ii) the fairness of the merger to, or any consideration that may be received in connection therewith by, the Selling Stockholders, nor did Moelis offer any opinion as to the relative fairness of the consideration of $4.50 per share in cash to be received by the stockholders of GLG (other than the Selling Stockholders) in the merger and the consideration to be received by the Selling Stockholders in the share exchange. Moelis also assumed, with consent of the special committee, that the representations and warranties of all parties to the merger agreement are true and correct, that each party to the merger agreement will perform all of the covenants and agreements required to be performed by such party, that all conditions to the consummation of the merger will be satisfied without waiver thereof, and that the merger will be consummated in a timely manner in accordance with the terms described in the merger agreement, without any modifications or amendments thereto or any adjustment to the merger consideration of $4.50 per share in cash to be received by the stockholders of GLG (other than the Selling Stockholders). In rendering its opinion, Moelis also assumed, with the special committee’s consent, that the final executed form of the merger agreement does not differ in any material respect from the draft that Moelis examined. Moelis was not authorized to and did not solicit indications of interest in a possible transaction with GLG from any party.

 

Moelis, in arriving at its opinion, among other things:

 

 

In connection with its review, Moelis did not assume any responsibility for independent verification of any of the financial, legal, regulatory, tax, accounting and other information supplied to, discussed with, or reviewed by

Moelis for the purpose of its opinion and, with the special committee’s consent, relied on such information being complete and accurate in all material respects. In addition, at the special committee’s direction, Moelis did not make any independent evaluation or appraisal of any of the assets or liabilities (contingent, derivative, off-balance-sheet, or otherwise) of GLG, nor was Moelis furnished with any such evaluation or appraisal. For the purposes of its analysis and opinion, Moelis was directed by the special committee to use the average of the Wall Street analysts’ estimates referred to above with certain additional assumptions provided by management of GLG.

 

Moelis’s opinion was necessarily based on economic, monetary, market and other conditions as in effect on, and the information made available to Moelis as of, the date of the opinion.

 

In addition, the special committee did not ask Moelis to address, and Moelis’s opinion did not address, the fairness to, or any other consideration of, the holders of any class of securities, creditors or other constituencies of GLG, other than the holders of GLG common stock that are not Selling Stockholders. Moelis also did not express any opinion as to the fairness of the amount or nature of any compensation to be received by any of GLG’s officers, directors or employees, or any class of such persons, relative to the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders) in the merger or otherwise.

 

Moelis provided its opinion for the use and benefit of the special committee in its evaluation of the transaction. The Moelis opinion was approved by a Moelis fairness opinion committee.

 

Financial Analyses

 

The following is a summary of the material financial analyses presented by Moelis to the special committee on May 16, 2010, in connection with the delivery of the opinion described above.

 

The summary set forth below does not purport to be a complete description of the analyses performed and factors considered by Moelis in arriving at its opinion, nor is the order of analyses described below meant to indicate the relative weight or importance given to those analyses by Moelis. The preparation of a fairness opinion is a complex process involving various determinations as to the most appropriate and relevant methods of financial analysis and the application of those methods to the particular circumstances; therefore, such an opinion is not readily susceptible to partial analysis or summary description. With respect to the comparable public companies analysis and the precedent transactions analysis summarized below, no company, business or transaction used in such analyses as a comparison is either identical or directly comparable to GLG, GLG’s businesses or the proposed transaction, nor is an evaluation of such analyses entirely mathematical. These analyses necessarily involve complex considerations and judgments concerning financial and operating characteristics and other factors. In arriving at its opinion, Moelis did not attribute any particular weight to any analysis or factor considered by it, but rather made qualitative judgments as to the significance and relevance of each analysis and factor. Accordingly, Moelis believes that its analyses must be considered as a whole and that selecting portions of its analyses and of the factors considered by it, without considering all factors and analyses, would, in the view of Moelis, create an incomplete and misleading view of the analyses underlying Moelis’s opinion.

 

Some of the summaries of financial analyses below include information presented in tabular format. In order to understand fully Moelis’s analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the analyses performed by Moelis. Considering the data described below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Moelis’s analyses.

 

The analyses performed by Moelis include analyses based upon forecasts of future results, which results might be significantly more or less favorable than those upon which Moelis’s analyses were based. The analyses do not purport to be appraisals or to reflect the prices at which GLG’s or Man’s shares might trade at any time following the announcement of the transaction. Because the analyses are inherently subject to uncertainty, being based upon numerous factors and events, including, without limitation, factors relating to general economic and competitive conditions beyond the control of the parties or their respective advisors, neither Moelis nor any other person assumes responsibility if future results or actual values are materially different from those contemplated below.

Comparable Public Companies Analysis

 

Moelis analyzed the market values and trading multiples of GLG and generally comparable publicly traded alternative asset management companies and traditional asset management companies. Using publicly available information, Moelis selected and analyzed the market values and trading multiples of GLG and the corresponding trading multiples for the North American and European publicly traded alternative and traditional asset management companies listed below:

 

Alternative Asset Management Companies

 

North American

 

 

European

 

 

Traditional Asset Management Companies

 

North American

 

 

 

European

 

 

Moelis calculated the range of trading multiples for all of the selected companies listed above, as well as just for Och-Ziff Capital, Fortress Investment Group, Ashmore Group, BlueBay and Man, or the peer group companies, which it considered the most directly comparable publicly traded companies to GLG relative to the other companies selected for the analysis. All multiples were based on the closing stock prices of the selected companies on May 14, 2010. Moelis reviewed enterprise values of the selected companies as multiples of, among other things, estimated calendar year 2010 and estimated calendar year 2011 earnings before interest, taxes, depreciation and amortization, or EBITDA. Moelis calculated enterprise value as the market capitalization (or equity value), plus total debt and minority interests and preferred stock, less cash and cash equivalents. Moelis also reviewed price to earnings multiples, or P/E, which is the per share equity value of the selected companies as a multiple of earnings per share, or EPS.

 

Estimated financial data for the selected companies were based on publicly available Wall Street research analysts’ estimates. At the direction of GLG’s management, estimated financial data for GLG was based on the average of Wall Street research analysts’ estimates and in the case of GLG’s estimated EPS, also included certain interest and tax assumptions as per GLG’s management.

 

The following table summarizes the range of trading multiples for all selected companies and the range of trading multiples for the peer group companies:

 

 

Based upon the foregoing and qualitative judgments related primarily to differing fund types and investment strategies, growth prospects, profitability margins and relative recent operating performance, Moelis selected multiple ranges for each metric, applied the selected ranges to the relevant statistic for GLG and calculated an implied range of GLG stock prices as compared to the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders). The following table presents the results of such analysis, assuming a $4.50 per share cash consideration for all shares of GLG common stock in the merger and the share exchange:

 

Moelis noted that, in each case, the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders) was above such range.

 

Precedent Transaction Analysis

 

Moelis reviewed the financial terms of 22 precedent merger and acquisition transactions involving alternative asset management companies and 18 precedent merger and acquisition transactions involving traditional asset management companies announced since November 2007. Moelis selected the transactions based on a number of criteria, including the nature of the target companies’ business and assets under management, or AUM.

 

Moelis noted that the majority of precedent transactions reviewed occurred under significantly different credit and market conditions than those prevailing as of May 14, 2010, the last trading day prior to the delivery of Moelis’s opinion. For purposes of certain of the analyses described below Moelis selected eight of these transactions, two involving alternative asset management companies and six involving traditional asset management companies, because they were the only precedent transactions that had publicly disclosed EBITDA for the 12-month period prior to announcement of the transaction, or LTM EBITDA. The following table sets forth a list of all precedent transactions reviewed (the eight selected precedent transactions are identified in bold):

 

Precedent Transactions

 

 

For each of the selected transactions identified above, Moelis calculated the ratio of implied equity value to LTM EBITDA at the time the transaction was announced. Moelis used equity value and LTM EBITDA based on public filings and press releases. The following table presents the results of such analysis:

 

 

Moelis noted that given the sharp decrease in 2009 earnings due to global economic downturn, the use of LTM EBITDA for GLG would not provide an accurate representation of the normalized cash flow profile for GLG going forward. Thus, for purposes of this analysis Moelis applied precedent transaction LTM EBITDA multiples to calendar year 2010 and 2011 estimated EBITDA for GLG (based on the average of Wall Street research analysts’ estimates).

 

In addition, for the 22 precedent merger and acquisition transactions involving alternative asset management companies and 18 precedent merger and acquisition transactions involving traditional asset management

companies reviewed, Moelis calculated the ratio of implied equity value to AUM for the target company for the latest available period at the time the transaction was announced. Moelis used equity value and AUM data based on public filings and press releases. The following table presents the results of such analysis:

 

 

Based upon the foregoing and qualitative judgments related to the characteristics of the selected precedent transactions, Moelis selected a range of implied equity value to LTM EBITDA multiples for the selected precedent transactions of 7.0x to 10.0x. Moelis then applied such multiple ranges to GLG’s 2010 and 2011 estimated EBITDA, to derive an implied range of equity values for each share of GLG common stock. Moelis also selected a range of implied equity values as a percentage of target AUM for the precedent transactions of 4% to 6% and applied this range to GLG’s AUM to derive an implied range of equity values for each share of GLG common stock. The following table sets forth the results of these calculations, assuming equal per share consideration for all shares of GLG common stock in the merger and the share exchange:

 

 

Moelis noted that in each case, the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders) was above such range.

 

Shares Traded Analysis

 

Moelis reviewed the historical trading prices and volumes for GLG common stock for the 12-month period ended May 14, 2010. Moelis analyzed the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders) in relation to such 12-month period’s high and low closing prices of GLG common stock, which ranged from $2.58 to $4.52 per share. Moelis noted that 356.2 million shares of GLG common stock traded in the 12-month period ended May 14, 2010 and approximately 99.5% of these shares traded at or below $4.50 per share.

 

Purchase Price Premium Analysis

 

Moelis performed a purchase price premium analysis based upon the premiums paid in the 16 public company transactions that were announced in the 12-month period ended May 14, 2010 in which the target company was a publicly traded North American company, the transaction value was less than $3 billion and involved both stock and cash consideration. For each transaction, Moelis calculated the premium per share paid by the acquiror by comparing the announced transaction value per share to the target company’s historical average closing share price during the following periods: (i) one trading day prior to announcement, (ii) five trading days prior to announcement and (iii) 20 trading days prior to announcement. The results of this analysis are summarized below:

 

 

The reasons for and the circumstances surrounding each of the transactions analyzed in the purchase price premium analysis were diverse and there are inherent differences in the business, operations, financial conditions and prospects of GLG and the companies included in the purchase price premium analysis. In order to arrive at a single implied price per share range for GLG common stock, Moelis selected a representative range of implied premiums for the transaction of 25% to 35% and applied this range of premiums to the closing price of GLG common stock on May 14, 2010 of $2.91, the last trading day before the announcement of the transaction. This range was selected because it reflected the median purchase price premiums listed above, with an increased high end in order to yield a more conservative analysis. The results of this analysis implied a price per share range for

GLG common stock of $3.64 to $3.93. Moelis noted that the merger consideration of $4.50 per share in cash to be received by GLG’s stockholders (other than the Selling Stockholders) was above such range.

 

Other Information

 

The consideration to be paid in the merger to GLG’s stockholders (other than the Selling Stockholders) was determined through negotiations between the special committee, on the one hand, and Man, on the other hand, and the decision by the special committee to enter into the merger agreement was solely that of the special committee. Moelis acted as financial advisor to the special committee in connection with and participated in certain of the negotiations leading to the merger. Moelis did not, however, recommend any specific amount of consideration to GLG or the special committee or that any specific amount of consideration constituted the only appropriate consideration for the merger. The Moelis opinion and financial analyses, taken together, were only one of many factors considered by the special committee in its evaluation of the merger and should not be determinative of the views of the special committee or GLG’s management with respect to the merger or the merger consideration.

 

The special committee retained Moelis based upon Moelis’s experience and expertise. Moelis is an investment banking firm with substantial experience in transactions similar to the proposed merger. Moelis, as part of its investment banking business, is continually engaged in the valuation of businesses and securities in connection with business combinations and acquisitions and for other purposes.

 

Under the terms of the engagement letter between Moelis and GLG, GLG agreed to pay Moelis (i) a nonrefundable work fee of $500,000 which will be offset, to the extent previously paid, against the transaction fee described below, (ii) an opinion fee of $1.5 million, which became payable upon delivery of the Moelis opinion described above, and which fee will be offset, to the extent previously paid, against the transaction fee and (iii) a transaction fee of $4.5 million plus 0.6% of the equity value (as defined in the engagement letter) in excess of the equity value implied at a price of $4.50 per share payable upon the closing of (a) the sale of all of a majority of GLG’s equity securities to a third party acquiror, (b) the merger or combination of GLG with that of a third party acquiror, or (c) a third party acquiror’s acquisition of all or a significant portion of the assets, properties or business of GLG, which transaction fee is payable if, at any time prior to the expiration of twelve months following the termination of Moelis’s engagement, GLG enters into an agreement that results in a transaction described above, or consummates a transaction described above. In addition, GLG agreed to pay Moelis a termination fee of equal to 25% of any “termination fee”, “break-up fee”, “topping fee”, “expense reimbursement” or other form of compensation payable to GLG or of the value of any option to purchase any securities or assets that GLG is granted in the event that a transaction described above fails to close following the execution of an agreement with respect to such transaction, which termination fee would be in lieu of and would not exceed the transaction fee described above. In addition, GLG has agreed to indemnify Moelis and its affiliates (and their respective directors, officers, agents, employees and controlling persons) against certain liabilities and expenses, including liabilities under the federal securities laws, related to or arising out of Moelis’s engagement. Moelis may provide investment banking services to GLG, Man and Man’s affiliates in the future, for which Moelis would expect to receive compensation.

 

Other Written Presentations by Moelis

 

In addition to the presentation made to the special committee of GLG on May 16, 2010 described above, Moelis submitted additional written materials to the special committee on May 6, 2010 and May 16, 2010. These written materials have been filed as exhibits to the Schedule 13E-3 filed with the SEC in connection with the merger, will be made available for inspection and copying at the principal executive offices of GLG during its regular business hours by any interested holder of GLG common stock, and copies may be obtained by requesting them in writing from GLG at the address provided under the caption “Where You Can Find More Information” below. These additional written materials do not constitute, or form the basis of, an opinion of Moelis with respect to any matters. Moelis provided these materials for the use and benefit of the special committee in connection with the merger.

 

On May 6, 2010, Moelis made a written presentation to the special committee to assist in the special committee’s negotiations with Man. This presentation contained an outline of the current status of the negotiations between the parties and Moelis’s preliminary valuation analyses (including a comparable public companies analysis, a precedent transactions analysis, a historical shares traded analysis, a purchase price premium analysis and indications of market

value of GLG), using, at the direction of the special committee, estimates for GLG sourced from one Wall Street research analyst. The financial analyses in this presentation were based on market, economic and other conditions as they existed as of the date of the presentation, as well as other information that was available at that time. Accordingly, the results of the financial analyses presented on May 6, 2010 differed from those in the May 16, 2010 presentation due to changes in those conditions. Among other things, multiples attributable to selected companies changed as those companies’ stock prices changed, and implied transaction multiples changed as GLG’s and Man’s financial results (as well as estimates prepared by Wall Street research analysts) changed. In addition, in the May 16, 2010 presentation and written opinion described above GLG management directed Moelis to use the average of Wall Street research analysts’ estimates for its analyses instead of just one Wall Street research analyst.

 

On May 16, 2010, at the request of the special committee, Moelis submitted a supplemental written presentation to the special committee regarding Man based on publicly available information that included (i) a current situation overview, including reasons for Man’s recent underperformance and three-year stock price performance, (ii) a qualitative comparison to GLG, including a high-water mark analysis, and (iii) a summary of Wall Street research analysts’ estimates and price targets.

 

On May 16, 2010, following the execution of the merger agreement and at the request of the special committee, Moelis updated its written presentation described above under “Opinion of Special Committee’s Financial Advisor” to include the final key terms of the merger agreement and to revise certain non-material items. Moelis’s financial analyses in this presentation are in substance the same as the financial analyses included in the original May 16, 2010 presentation.

 

Goldman Sachs delivered its oral opinion, which was subsequently confirmed in writing, to the GLG Board that, as of May 17, 2010 and based upon and subject to the factors and assumptions set forth in its written opinion, the Aggregate Consideration (defined below) to be paid to the holders (other than Man and its affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes pursuant to the share exchange agreement and merger agreement was fair from a financial point of view to such holders. The “Aggregate Consideration” is equal to the sum of the aggregate of (i) the right to receive $4.50 in cash into which each outstanding share of GLG common stock (other than the Rollover Shares (defined below) and shares held by Man and its subsidiaries not specified in the merger agreement) will be converted under the merger agreement (the “Public Consideration”), (ii) the right to receive $4.50 in cash in the merger into which each share of GLG common stock into which convertible notes are converted prior to the merger will be converted under the merger agreement (the “Convertible Consideration”), (iii) the Man ordinary shares for which shares of GLG common stock received upon the exchange of FA Sub 2 exchangeable shares (the “Exchanged Shares”) will be exchanged under the share exchange agreement (the “Exchangeable Consideration”) and (iv) the Man ordinary shares for which shares of GLG common stock held by the Principals and the LPs (collectively, the “Principal Stockholders”) (other than shares into which convertible notes were converted and any shares acquired in open market purchases) will be exchanged (the “Rollover Consideration”, and such shares of GLG common stock, together with the Exchanged Shares, the “Rollover Shares”).

 

The full text of the written opinion of Goldman Sachs, dated May 17, 2010, which sets forth assumptions made, procedures followed, matters considered and limitations on the review undertaken in connection with the opinion, is attached as Appendix E. Goldman Sachs provided its opinion for the information and assistance of the GLG Board in connection with its consideration of the transactions contemplated by the share exchange agreement and merger agreement (the “Transactions”). The Goldman Sachs opinion is not a recommendation as to how any holder of shares of GLG common stock, FA Sub 2 exchangeable shares and/or convertible notes should vote with respect to the Transactions or any other matter.

 

In connection with rendering the opinion described above and performing its related financial analyses, Goldman Sachs reviewed, among other things:

 

 

 

Goldman Sachs also held discussions with members of the senior management of GLG and Man regarding their assessment of the strategic rationale for, and the potential benefits of, the Transactions and the past and current business operations, financial condition, and future prospects of their respective companies; reviewed the reported price and trading activity for the shares of GLG common stock and the Man ordinary shares; compared certain financial and stock market information for GLG and Man with similar information for certain other companies the securities of which are publicly traded; reviewed the financial terms of certain recent business combinations in the financial and asset management industries specifically and in other industries generally; and performed such other studies and analyses, and considered such other factors, as it considered appropriate.

 

For purposes of rendering the opinion described above, Goldman Sachs relied upon and assumed, without assuming any responsibility for independent verification, the accuracy and completeness of all of the financial, legal, regulatory, tax, accounting and other information provided to, discussed with or reviewed by it, and Goldman Sachs did not assume any responsibility for any such information. In that regard, Goldman Sachs has assumed with the consent of GLG that the Forecasts and the Synergies were reasonably prepared on a basis reflecting the best then currently available estimates and judgments of the management of GLG. As GLG was aware, the management of Man did not make available its forecasts of the future financial performance of Man. With the consent of GLG, for purposes of rendering the opinion described above, Goldman Sachs relied upon published research analyst estimates of Man. In addition, Goldman Sachs did not make an independent evaluation or appraisal of the assets and liabilities (including any contingent, derivative or other off-balance-sheet assets and liabilities) of GLG or Man or any of their respective subsidiaries, and Goldman Sachs was not furnished with any such evaluation or appraisal. Goldman Sachs assumed that all governmental, regulatory or other consents and approvals necessary for the consummation of the Transactions would be obtained without any adverse effect on GLG or Man or on the expected benefits of the Transactions in any way meaningful to its analysis. Goldman Sachs also assumed that the Transactions would be consummated on the terms set forth in the share exchange agreement and merger agreement without the waiver or modification of any term or condition the effect of which would be in any way meaningful to Goldman Sachs’ analysis.

 

Goldman Sachs’ opinion did not address the underlying business decision of GLG to engage in the Transactions, or the relative merits of the Transactions as compared to any strategic alternatives that may have been available to GLG; nor did it address any legal, regulatory, tax or accounting matters. Goldman Sachs was not requested to solicit, and did not solicit, interest from other parties with respect to an acquisition of, or other business combination with, GLG or any other alternative transaction. Goldman Sachs’ opinion addressed only the fairness from a financial point of view, as of May 17, 2010, of the Aggregate Consideration to be paid to the holders (other than Man and its affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes pursuant to the share exchange agreement and merger agreement. Goldman Sachs did not express any view on, and its opinion did not address, any other term or aspect of the share exchange agreement or merger agreement or the Transactions or any term or aspect of any other agreement or instrument contemplated by the share exchange agreement or merger agreement or entered into or amended in connection with the Transactions, including, without

limitation, other agreements being entered into by GLG as of the date of the opinion in connection with the Transactions, the Warrant Offers (as defined in the merger agreement), the fairness of the Transactions to, or any consideration received in connection therewith by, the holders of any other class of securities, creditors, or other constituencies of GLG; nor as to the fairness of the consideration to be paid to the holders of the GLG warrants as provided in the merger agreement or the amount or nature of any compensation to be paid or payable to any of the officers, directors or employees of GLG, or class of such persons, in connection with the Transactions, whether relative to the Aggregate Consideration to be paid to the holders of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes pursuant to the share exchange agreement and the merger agreement or otherwise; nor as to the allocation of the Aggregate Consideration as among the Public Consideration, the Convertible Consideration, the Exchangeable Consideration and the Rollover Consideration. Goldman Sachs did not express any opinion as to the prices at which Man ordinary shares would trade at any time or as to the impact of the Transactions on the solvency or viability of GLG or Man or the ability of GLG or Man to pay their obligations when they come due. Goldman Sachs’ opinion was necessarily based on economic, monetary market and other conditions as in effect on, and the information made available to it as of, the date of the opinion, and Goldman Sachs assumed no responsibility for updating, revising or reaffirming its opinion based on circumstances, developments or events occurring after the date of the opinion. Goldman Sachs’ opinion was approved by a fairness committee of Goldman, Sachs & Co.

 

For purposes of its analysis and opinion, Goldman Sachs was preliminarily directed by GLG to use the average of the publicly available research analysts’ estimates for GLG for 2010 and 2011. Management of GLG subsequently adopted the estimates set forth under “— Certain Forward-Looking Financial Information — Projections” as management projections and confirmed the use of these estimates for purposes of Goldman Sachs’ fairness opinion.

 

The following is a summary of the material financial analyses delivered by Goldman Sachs to the board of directors of GLG in connection with rendering the opinion described above. The following summary, however, does not purport to be a complete description of the financial analyses performed by Goldman Sachs, nor does the order of analyses described represent relative importance or weight given to those analyses by Goldman Sachs. Some of the summaries of the financial analyses include information presented in tabular format. The tables must be read together with the full text of each summary and are alone not a complete description of Goldman Sachs’ financial analyses. Except as otherwise noted, the following quantitative information, to the extent that it is based on market data, is based on market data as it existed on or before May 17, 2010 and is not necessarily indicative of current market conditions.

 

Premiums to Market Capitalization and Implied Transaction Multiples.  Goldman Sachs reviewed and analyzed the premium of the Public Consideration, Exchangeable Consideration and Rollover Consideration collectively, in each case calculated based on the closing price of Man ordinary shares on May 14, 2010 and a USD/GBP exchange rate of 1.45555, on the one hand, to the market capitalization of GLG on March 25, 2010 (the last trading day prior to the date on which Man was reported to be in talks with potential targets, including GLG); to the highest and lowest market capitalizations of GLG over the twelve months prior to May 14, 2010; and to the market capitalization of GLG on May 14, 2010, in each case, on the other hand.

 

The following table presents the results of this analysis:

 

 

Goldman Sachs calculated the enterprise value of GLG implied by the Transactions and reviewed and analyzed multiples of such enterprise value to the revenue of GLG for the twelve months ended March 31, 2010 and to the estimated 2010 and 2011 earnings before interest, tax, depreciation and amortization, or EBITDA, of GLG, based

on the Forecasts, and such enterprise value as a percentage of assets under management of GLG as of March 31, 2010. The following table presents the results of this analysis:

 

 

 

 

Goldman Sachs also calculated the Aggregate Consideration based on the closing price of Man ordinary shares on May 14, 2010 and a USD/GBP exchange rate of 1.45555 and reviewed and analyzed multiples of the Aggregate Consideration to estimated 2010 and 2011 net income of GLG, based on the Forecasts. The following table present the results of this analysis:

 

 

 

 

Historical Exchange Ratio Analysis.  Goldman Sachs reviewed and considered the average implied historical exchange ratios determined by dividing the daily closing prices of shares of GLG common stock by the daily closing prices of the Man ordinary shares, using the USD/GBP exchange rates in effect on the relevant dates according to Bloomberg, during the period from GLG’s stock market debut via its merger with Freedom on November 2, 2007 to May 14, 2010 and the two-year, one-year, six-month, three-month and year-to-date periods ended May 14, 2010. In addition, Goldman Sachs calculated the exchange ratio of the closing price of Man ordinary shares to the closing price of shares of GLG common stock on May 14, 2010. Goldman Sachs compared the historical exchange ratios and average exchange ratios with the exchange ratio received under the share exchange agreement. The following table presents the results of this analysis:

 

 

Historical Share Price Analysis.  Goldman Sachs also reviewed and considered the closing prices of shares of GLG common stock on May 14, 2010; the average closing prices for shares of GLG common stock during the period from GLG’s stock market debut via its merger with Freedom on November 2, 2007 to May 14, 2010 and the twelve-month, six-month, three-month and year-to-date periods ended May 14, 2010. Goldman Sachs compared the

historical and average closing prices of shares of GLG common stock to the cash consideration per share of GLG common stock to be received under the merger agreement. The following table presents the results of this analysis:

 

 

Selected Companies Analysis.  Goldman Sachs reviewed and compared certain financial ratios and public market multiples for GLG and Man with corresponding financial ratios and public market multiples for the following selected publicly traded corporations:

 

 

 

 

 

 

 

Although none of the selected companies is directly comparable to GLG or Man, these selected companies were chosen because they are publicly traded companies with operations that for purposes of analysis may be considered similar to certain operations of GLG and Man.

 

Goldman Sachs calculated and compared the financial ratios and public market multiples for the selected companies based on publicly available information, estimates from Institutional Brokers’ Estimate System (“IBES”), USD/GBP exchange rates in effect on the relevant dates according to Bloomberg and closing prices of shares of the selected companies on May 14, 2010. Goldman Sachs calculated the financial ratios and public market multiples for GLG and Man based on publicly available information, IBES estimates for Man and the Forecasts for GLG, the closing prices of shares of GLG common stock on March 25, 2010 (the last trading day prior to the date on which Man was reported to be in talks with potential targets, including GLG) and May 14, 2010, and the equity market capitalization and enterprise value of GLG implied by the Transactions. With respect to each of GLG, Man and the selected companies, Goldman Sachs calculated:

 

 

The results of this analysis can also be summarized as follows:

 

 

 

 

 

 

 

 

 

Present Value of Future Value of GLG Analysis.  Goldman Sachs performed an illustrative analysis of the implied present value of GLG’s future value, as reflected by GLG’s future convertible note-diluted market capitalization, using the Forecasts. Goldman Sachs first calculated the implied future value of GLG as of December 31, 2010, by applying a range of price to forward earnings multiples of 11.3 x to 12.3 x to estimated 2011 net income (excluding interest payable on the convertible notes), and then discounted each of these values back to May 14, 2010, using a range of discount rates from 10.0% to 14.0%, reflecting estimates of GLG’s cost of equity. This analysis resulted in a range of implied present values of GLG of $1,125 million to $1,248 million.

 

Present Value of Man’s Future Share Price Analysis.  Goldman Sachs performed an illustrative analysis of the implied present value of the future price of a Man ordinary share using IBES estimates. Goldman Sachs first calculated the implied future value of a Man ordinary share as of December 31, 2010, by applying a range of price to forward earnings multiples of 11.2 x to 14.2 x to the estimated 2011 U.S. dollar earnings per Man ordinary share, and then discounted each of these values back to May 14, 2010, using a range of discount rates from 9.0% to 13.0%, reflecting estimates of Man’s cost of equity. This analysis resulted in a range of implied present values of Man ordinary shares of $4.15 to $5.38.

 

Goldman Sachs also performed an illustrative analysis of the implied present values of the future price of a Man ordinary share pro forma for completion of the Transactions using IBES estimates for Man, or a pro forma Man ordinary share, the Forecasts and the Synergies. Goldman Sachs first calculated the implied future values of a pro forma Man ordinary share as of December 31, 2010, by applying Man and a range of blended price to forward earnings multiples of 11.2 x to 11.8 x to the estimated 2011 U.S. dollar earnings per pro forma Man ordinary share, both with and without reflecting the earnings per share accretion from the Synergies, and then discounted each of

these values back to May 14, 2010, using a range of discount rates from 9.0% to 13.0%, reflecting estimates of the combined company’s cost of equity. This analysis resulted in a range of implied present values of pro forma Man ordinary shares, without reflecting the earnings per share accretion from the Synergies, of $4.51 to $4.88 and, with reflecting the earnings per share accretion from the Synergies, of $4.69 to $5.07.

 

Pro Forma Transaction Analysis.  Goldman Sachs prepared illustrative pro forma analyses of the potential financial impact of the Transactions using the Synergies, the Forecasts for GLG and the IBES estimates for Man, in each case for fiscal year 2011. The Synergies included GLG’s estimated $50 million pre-tax synergies phased in at 25% and 100% for the 2011 fiscal year, which, on the basis of the blended tax rate estimated by GLG, would respectively result in an estimated $10 million in post-tax phased in synergies and $40 million in post-tax phased in synergies for the 2011 fiscal year. Using these figures, Goldman Sachs compared the IBES estimate of earnings per Man ordinary share for fiscal year 2011, on a standalone basis, to the projected earnings per pro forma Man ordinary share for fiscal year 2011. Based on such analyses, the Transactions would be accretive to Man’s shareholders on an earnings per share basis both before and after the Synergies, whether phased in 25% or 100%, for fiscal year 2011, which can be summarized as follows:

 

 

The preparation of a fairness opinion is a complex process and is not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary set forth above, without considering the analyses as a whole, could create an incomplete view of the processes underlying Goldman Sachs’ opinion. In arriving at its fairness determination, Goldman Sachs considered the results of all of its analyses and did not attribute any particular weight to any factor or analysis considered by it. Rather, Goldman Sachs made its determination as to fairness on the basis of its experience and professional judgment after considering the results of all of its analyses. No company or transactions used in the above analyses as a comparison are directly comparable to GLG or Man or the Transactions.

 

Goldman Sachs prepared these analyses for purposes of Goldman Sachs’ providing its opinion to the GLG Board as to the fairness from a financial point of view to holders (other than Man and its affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes of the Aggregate Consideration to be paid pursuant to the share exchange agreement and merger agreement. These analyses do not purport to be appraisals nor do they necessarily reflect the prices at which businesses or securities actually may be sold. Analyses based upon forecasts of future results are not necessarily indicative of actual future results, which may be significantly more or less favorable than suggested by these analyses. Because these analyses are inherently subject to uncertainty, being based upon numerous factors or events beyond the control of the parties or their respective advisors, none of GLG, Man, Goldman Sachs or any other person assumes responsibility if future results are materially different from those forecast.

 

The Aggregate Consideration was determined through negotiations among GLG, the special committee, the Principals and Man and was approved by the special committee of the GLG Board and by the GLG Board. Goldman Sachs provided advice to GLG during these negotiations. Goldman Sachs did not, however, recommend any specific amount or allocation of consideration to GLG or its board of directors or that any specific amount or allocation of consideration constituted the only appropriate consideration for the Transactions.

 

As described above, Goldman Sachs’ opinion to the GLG Board was one of many factors taken into consideration by the GLG Board in making its determination to approve the share exchange agreement and merger agreement. The foregoing summary does not purport to be a complete description of the analyses performed by Goldman Sachs in connection with the fairness opinion. The foregoing summary is qualified in its entirety by reference to the written opinion of Goldman Sachs attached as Appendix E, but does describe all material bases for and methods of arriving at the opinion’s findings.

 

Goldman Sachs International and its affiliates are engaged in investment banking and financial advisory services, commercial banking, securities trading, investment management, principal investment, financial planning, benefits counseling, risk management, hedging, financing, brokerage activities and other financial and non-financial activities and services for various persons and entities. In the ordinary course of these activities

and services, Goldman Sachs International and its affiliates may at any time make or hold long or short positions and investments, as well as actively trade or effect transactions, in the equity, debt and other securities (or related derivative securities) and financial instruments (including bank loans and other obligations) of third parties, GLG, Man and any of their respective affiliates and any affiliates of the Principal Stockholders or any currency or commodity that may be involved in the Transactions for their own account and for the accounts of their customers. Goldman Sachs acted as financial advisor to GLG in connection with, and has participated in certain of the negotiations leading to, the Transactions. Goldman Sachs has provided certain investment banking and other financial services to GLG and its affiliates from time to time for which its investment banking division has received, and may receive, compensation. Goldman Sachs also has provided certain investment banking and other financial services to Man and its affiliates from time to time for which its investment banking division has received, and may receive, compensation. Goldman Sachs also may provide investment banking and other financial services to GLG, Man, the Principal Stockholders and their respective affiliates in the future for which its investment banking division may receive compensation. However, except for GLG’s engagement of Goldman Sachs in connection with the Transaction, during the two-year period ended May 17, 2010, Goldman Sachs has not been engaged by GLG, Man or the Individual Principals to provide investment banking and other financial services for which it has received compensation. Certain Principal Stockholders are former employees of Goldman Sachs International or its affiliates.

 

The board of directors of GLG selected Goldman Sachs as its financial advisor because it is an internationally recognized investment banking firm that has substantial experience in transactions similar to the Transactions. Pursuant to a letter agreement dated May 14, 2010 and amended on May 16, 2010, GLG engaged Goldman Sachs to act as its financial advisor in connection with the possible sale of all of GLG. Pursuant to the terms of this engagement letter, GLG has agreed to pay Goldman Sachs a transaction fee of approximately $4 million, with $1 million of the fee having been payable upon the execution of the share exchange agreement and merger agreement and the remainder of the fee being payable upon consummation of the Transactions. In addition, GLG has agreed to reimburse Goldman Sachs for its expenses arising, including attorneys’ fees and disbursements, and to indemnify Goldman Sachs and related persons against certain liabilities that may arise out of, GLG’s engagement of Goldman Sachs, including liabilities under federal securities laws.

 

Other Presentations by Goldman Sachs

 

In addition to the presentation made to the board of directors of GLG on May 16, 2010 described above, Goldman Sachs also prepared written materials for a presentation to the board of GLG on April 29, 2010 and delivered written and oral presentations to members of the management of GLG on October 1, 2009, February 23, 2010, March 6, 2010 and April 30, 2010. Copies of these written materials have been filed as exhibits to the Schedule 13E-3 filed with the SEC in connection with the Transactions and will be made available for inspection and copying at the principal executive offices of GLG during its regular business hours by any interested holder of GLG common stock. Copies may be obtained by requesting them in writing from GLG at the address provided under the caption “Where You Can Find More Information” below.

 

None of these other written or oral presentations by Goldman Sachs, alone or together, constitute, or form the basis of, an opinion of Goldman Sachs with respect to the Aggregate Consideration to be paid pursuant to the share exchange agreement and merger agreement. Information contained in these other written and oral presentations to GLG management is substantially similar to the information provided in Goldman Sachs’ written presentation to the board of directors of GLG on May 16, 2010, as described above. The October 1, 2009 materials contained an analysis of Man’s business fundamentals and preliminary valuation, strategic, structure and capital markets considerations. The February 23, 2010 materials contained a review of GLG and Man financial projections based on research analyst estimates, preliminary financial analyses, including market performance, selected companies and pro forma transaction analyses and analysis at various prices, a discussion of potential sources of synergies and preliminary areas of investigation of Man. The March 6, 2010 materials contained an updated review of GLG and Man financial projections based on research analyst estimates and preliminary financial analyses, including market performance, selected companies and pro forma transaction analyses and analysis at various prices. The April 29, 2010 materials contained an overview of Man’s business and preliminary financial analyses, including market performance, selected companies and implied transaction multiples analyses and analysis at various prices. The April 30, 2010 materials contained preliminary financial analyses, including implied transaction

multiples and selected companies analyses and analysis at various prices. These other written and oral presentations by Goldman Sachs contained, among other things, the following types of financial analyses:

 

 

Not all of the other written and oral presentations contained all of the financial analyses listed above. The financial analyses in these written presentations were based on market, economic and other conditions as they existed as of the dates of the respective presentations as well as other information that was available at those times. Accordingly, the results of the financial analyses differed due to changes in those conditions. Among other things, multiples attributable to selected companies changed as those companies’ stock prices changed, and implied transaction multiples changed as GLG’s and Man’s financial results (as well as projections based on research analyst estimates) changed. Finally, Goldman Sachs continued to refine various aspects of its financial analyses with respect to GLG and Man over time.

 

Man, Holdco and Merger Sub

 

Under the rules governing “going private” transactions, Man, Holdco and Merger Sub are deemed to be engaged in a “going private” transaction and are required to provide certain information regarding the purposes for the merger and share exchange and the reasons for the structure of the merger and share exchange. Man, Holdco and Merger Sub are making the statements included in this sub-section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

 

If the merger and share exchange are completed, Man will, indirectly through Holdco, own 100% of GLG. For Man, Holdco and Merger Sub, the purpose of the merger and share exchange is to effectuate the transactions contemplated by the merger agreement and share exchange agreement and allow Man to bear the rewards and risks of such ownership after GLG’s shares cease to be publicly traded.

 

Man has had surplus capital and liquid resources at its disposal for some time. From time to time, the Man Board considered acquisitions that are complementary to Man’s strategy, in particular equity long/short managers. Man also evaluates potential acquisition opportunities against strategic criteria and, having considered such criteria, believes that GLG is a strong strategic fit.

 

Man, Holdco and Merger Sub believe that the merger and share exchange will provide substantial strategic and commercial benefits to Man shareholders. These arise from the combination of two established investment management businesses with complementary investment strategies and the integration of distribution and relationship management, structuring and operations between the firms. The fund product offerings of GLG are centered around the discretionary investment style of GLG’s trading teams. Man’s fund product offerings generally draw on Man subsidiary AHL’s systematic managed futures trading style and/or on its multi-manager business, which allocates investor capital to a series of different hedge fund strategies. In addition, the two businesses have a complementary geography of distribution franchises and investors, offering the opportunity to market products into new markets and to new investors. After the closing of the merger and the share exchange, Man has the potential to add significant incremental funds under management through combining GLG’s investment offering with Man’s structuring and distribution expertise. The low correlation of performance between the quantitative investment style of Man and the discretionary investment style of GLG is expected to provide greater stability in the combined performance fee prospects and the creation of new high margin products for distribution. Additionally, Man, Holdco and Merger Sub believe that the merger and the share exchange will result in the expansion of the open-ended product offerings in onshore markets in single manager and combination formats to broaden and facilitate the raising of new assets in those markets. Furthermore, Man, Holdco and Merger Sub believe that there will be the potential for a subsequent organic build out of discretionary investment strategies by Man following completion of the merger and share exchange.

In addition, Man has identified potential annual run-rate cost savings after completion of the merger and share exchange of approximately $50 million with one-third of such savings expected to be achieved in Man’s fiscal year ending March 31, 2011 and the balance expected to be achieved in the first six months of the fiscal year ending March 31, 2012. Man expects that these cost savings will come from a combination of eliminating overlapping central functions, the integration of infrastructure and operational support areas such as technology, selected real estate savings and the delisting and deregistering of GLG in due course. The estimated cost of achieving these potential annual cost savings is $25 million.

 

After taking into consideration the Perella Weinberg sensitivity analysis showing the impact on earnings accretion/dilution of different levels of cost savings described under “Financial Analyses of the Financial Advisor to Man — May 13th Materials”, and following Man’s assessment of the actions necessary to achieve the potential cost savings, Man believes that the acquisition will be earnings accretive in the financial year ending March 31, 2012 and earnings neutral in the financial year ending March 31, 2011. Nothing in this subsection is intended to be a profit estimate for any period or a forecast of future profits, and statements relating to earnings accretion should not be interpreted to mean that Man’s earnings per share for the current or future financial periods will necessarily match or exceed Man’s historical published earnings per share. Statements included in this subsection in relation to earnings accretion are stated before amortization of intangibles arising from the acquisition.

 

Man, Holdco and Merger Sub believe that structuring the merger and share exchange as a merger and a share exchange is preferable to other transactions structures for the following reasons:

 

 

 

 

The Principals

 

Under the rules governing “going private” transactions, the Principals are deemed to be engaged in a “going private” transaction and are required to provide certain information regarding the purposes for the merger and the share exchange and the reasons for the structure of the merger and the share exchange. The Principals are making the statements included in this sub-section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act.

 

The Principals believe that the acquisition of GLG by Man:

 

 

 

In addition, the bifurcated structure of the acquisition transaction facilitated the accomplishment of the transaction for all of the stockholders of GLG because (1) Man would not have wanted to proceed with the transaction unless (a) the Selling Stockholders would become significant shareholders in Man, such that their incentives would be aligned with those of Man’s shareholders, and (b) Man could, using this structure, offer its ordinary shares as consideration pursuant to an exemption from the registration requirements under the Securities Act, and (2) the special committee would not have approved the share exchange transaction (and the related waiver of transfer restrictions under the GLG Shareholders Agreement) unless the unaffiliated stockholders were to receive a significant premium to the trading price of GLG common stock immediately prior to the public announcement of the proposed merger.

 

The decision by the Principals to engage in the transaction at the present time was influenced by the fact that GLG’s business had changed substantially during 2008 and 2009 against a backdrop of severe capital market dislocations, redemptions by investors in GLG funds and managed accounts, and decreased investment performance. While GLG had undertaken various initiatives to strengthen its platform, increase its overall AUM and improve its cost structure, the Principals remained concerned, given market conditions at such time, about the potentially protracted recovery of higher fee-yielding assets, uncertainty about the prospects of geographic expansion outside of GLG’s historic UK and European markets and a challenging macroeconomic environment. They concluded that a transaction with Man offered a better opportunity for an accelerated recovery of GLG’s core business by combining two highly complementary businesses than pursuing a recovery on a stand-alone basis.

 

The primary detriments of the acquisition transaction to the Principals are that they will bear the risk of any possible decrease in the earnings, growth or value of the combined Man and GLG business following the merger, and that all of the ordinary shares of Man to be received by them in the share exchange will be subject to a Share Lock-Up Deed of Trust described under “Special Factors — Interests of Certain Persons in the Merger — Share Lockup” below.

 

As a result of the transaction, the interests of the Principals in the net book value and net earnings of GLG will decrease from a direct interest of approximately 44% (approximately negative $126 million and negative $158 million, respectively) to an indirect interest (though ownership of Man ordinary shares) of approximately 10% (approximately negative $29 million and negative $36 million, respectively), Man’s interest in the net book value and net earnings of GLG will increase from 0% to 100% (approximately negative $286 million and negative $359 million, respectively) as a result of its acquisition of 100% of GLG’s shares, and the GLG unaffiliated stockholders’ interest in the net book value and net earnings of GLG will decrease from approximately 51% (approximately negative $146 million and negative $183 million, respectively) to 0% in exchange for the $4.50 per share in cash to be received upon the consummation of the merger. The net book value numbers specified above are based on GLG’s June 30, 2010 financial statements and the net earnings numbers specified above are based on GLG’s 2009 annual financial statements.

 

The primary benefits and detriments of the merger to GLG’s unaffiliated shareholders are the positive and negative factors, respectively, described under “Special Factors — Fairness of the Merger and Recommendation of the Special Committee and the GLG Board — The Special Committee” above.

 

The primary benefits and detriments of the merger to GLG are the positive and negative factors, respectively, considered by the GLG Board as described under “Special Factors — Fairness of the Merger and Recommendation of the Special Committee and the GLG Board — The GLG Board” above.

Position as to the Fairness of the Merger

 

Man, Holdco and Merger Sub

 

Man, Holdco and Merger Sub are making the statements included in this section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of Man,

Holdco and Merger Sub should not be construed as a recommendation to any stockholder as to how that stockholder should vote on the proposal to adopt the merger agreement.

 

Man, Holdco and Merger Sub endeavored to negotiate the terms of a transaction that would be most favorable to them, and not to the stockholders of GLG, and, accordingly, did not negotiate the merger agreement with a goal of obtaining terms that were fair to such stockholders. None of Man, Holdco or Merger Sub believes that it has or had any fiduciary duty to GLG or its stockholders, including with respect to the merger and its terms. GLG’s unaffiliated stockholders were, as described elsewhere in this proxy statement, represented by the special committee that negotiated with Man, Holdco and Merger Sub on their behalf, with the assistance of independent legal and financial advisors.

 

Accordingly, Man, Holdco and Merger Sub did not undertake an independent evaluation of the merger or the share exchange or engage a financial advisor, in each case, for the purpose of evaluating the fairness of the merger or the share exchange to GLG or its stockholders. Man, Holdco and Merger Sub did not participate in the deliberations of the special committee regarding, and did not receive advice from the special committee’s independent legal or financial advisors as to, the fairness of the merger or the share exchange to GLG’s unaffiliated stockholders. Man, Holdco and Merger Sub believe that the proposed merger and the share exchange are substantively fair to GLG’s unaffiliated stockholders based on the following factors:

 

 

Man, Holdco and Merger Sub also considered the following potentially negative factors:

 

 

Man, Holdco and Merger Sub believe that the merger and the share exchange are procedurally fair to GLG’s unaffiliated stockholders based on the following factors, including the factors considered by, and the findings of, the special committee and the board of directors of GLG with respect to the fairness of the merger and the share exchange, which Man, Holdco and Merger Sub adopt:

 

 

 

 

 

 

 

Man, Holdco and Merger Sub believe the merger and the share exchange are procedurally and substantively fair to GLG’s unaffiliated stockholders, for the reasons cited above, and in particular:

 

 

 

 

Man, Holdco and Merger Sub considered the historical and current stock price of GLG and analyzed the value of GLG based on its operation as a continuing business, and, to that extent, such analyses could be characterized as forms of going concern valuations. Man, Holdco and Merger Sub did not consider GLG’s net book value or liquidation value in their evaluation of the fairness of the merger and the share exchange to GLG’s unaffiliated stockholders because Man, Holdco and Merger Sub did not believe that GLG’s net book value or liquidation value were material or relevant to a determination of the substantive fairness of the merger and the share exchange. Man, Holdco and Merger Sub did not believe that GLG’s net book value was material to their conclusion regarding the substantive fairness of the merger and the share exchange because, in their view, net book value is not indicative of GLG’s market value since it is a purely historical measurement of financial position in accordance with U.S. generally accepted principles, or GAAP, and is not forward-looking or wholly based on fair value. Man, Holdco and Merger Sub did not consider the liquidation value of GLG because of their belief that liquidation value does not present a meaningful valuation for GLG and its business as GLG’s value is derived from cash flows generated from its continuing operations rather than from the value of assets that might be realized in a liquidation.

 

In making their determination as to the substantive fairness of the merger and the share exchange to GLG’s unaffiliated stockholders, Man, Holdco and Merger Sub were not aware of any firm offers during the prior two years by any person for the merger or consolidation of GLG with another company, the sale or transfer of all or substantially all of GLG’s assets or a purchase of GLG’s assets that would enable the holder to exercise control of GLG. Third party offers were therefore not considered by Man, Holdco and Merger Sub in reaching their conclusion as to fairness.

 

The foregoing discussion of the information and factors considered and given weight by Man, Holdco and Merger Sub in connection with the fairness of the merger and the share exchange is not intended to be exhaustive, but is believed to include all material factors considered by Man, Holdco and Merger Sub. Man, Holdco and Merger Sub did not find it practicable to assign, and did not assign, relative weights to the individual factors considered in reaching its conclusion as to the fairness of the merger and the share exchange. Rather, their fairness determination was made after consideration of all of the foregoing factors as a whole.

 

The Principals

 

The Principals are making the statements included in this section solely for the purposes of complying with the requirements of Rule 13e-3 and related rules under the Exchange Act. The views of the Principals should not be construed as a recommendation to any stockholder as to how that stockholder should vote on the proposal to adopt the merger agreement and the merger.

While the Principals did not undertake an independent evaluation of the merger or engage a financial advisor, in each case, for the purpose of evaluating the fairness of the merger to GLG or the GLG stockholders, the Individual Principals, in their capacities as directors of GLG, participated in the deliberations of the GLG Board regarding, and received advice from the GLG Board’s financial advisor as to the fairness from a financial point of view to the holders (other than Man and its affiliates) of shares of GLG common stock, FA Sub 2 exchangeable shares and convertible notes, of the Aggregate Consideration to be paid pursuant to the share exchange agreement and the merger agreement. The Principals adopted the GLG Board’s conclusion and analysis with respect to the fairness of the merger and the share exchange, including the factors discussed under “Special Factors — Fairness of the Merger and Recommendations of the Special Committee and the GLG Board — The GLG Board”, and believe that the proposed merger and share exchange are substantively and procedurally fair to GLG’s stockholders including the unaffiliated stockholders based on the factors considered by the GLG Board, including the recommendation of the special committee and the generally positive and favorable factors, as well as the generally negative and unfavorable factors, and the factors relating to procedural safeguards.

 

Man retained Perella Weinberg to act as its lead financial advisor in connection with the merger and the share exchange. Man selected Perella Weinberg to act as its lead financial advisor in connection with the merger and the share exchange based on Perella Weinberg’s qualifications, expertise and reputation and its knowledge of the industries in which Man conducts its business. Perella Weinberg, as part of its investment banking business, is continually engaged in performing financial analyses with respect to businesses and their securities in connection with mergers and acquisitions, leveraged buyouts and other transactions as well as for corporate and other purposes.

 

On March 9, 2010, Perella Weinberg initially discussed certain financial analyses with the Man Board. Perella Weinberg then provided updates to the Man Board on April 26, 2010, May 3, 2010 and May 13, 2010. References to the “March materials” are to Perella Weinberg’s materials dated March 9, 2010. References to the “April analyses” are to Perella Weinberg’s analyses presented to the Man Board on April 26, 2010 in connection with the presentation made by the management of Man. References to the “May 3rd materials” and the “May 13th materials” are to Perella Weinberg’s materials dated May 3, 2010 and May 13, 2010, respectively. References to the “Man board materials” refer collectively to the March materials, the April analyses, the May 3rd materials and the May 13th materials. Copies of the March materials, the May 3rd materials and the May 13th materials are attached as exhibits to the Schedule 13e-3, will be made available for inspection and copying at the principal executive offices of GLG during its regular business hours by any interested holder of GLG common stock, and copies may be obtained by requesting them in writing from GLG at the address provided under the caption “Where You Can Find More Information” below. The description of the analyses performed by Perella Weinberg set forth below is qualified by reference to the relevant Man board materials. The analyses discussed are summarized below.

 

In preparing the Man board materials, Perella Weinberg, among other things:

 

 

 

Perella Weinberg was not requested to, and did not, provide any opinion as to the fairness of the merger and the share exchange to Man or its shareholders, or to GLG or its stockholders. In preparing the Man board materials, Perella Weinberg assumed and relied upon, without independent verification, the accuracy and completeness of the financial and other information reviewed by or discussed with it and took into account the Man Board’s commercial assessment of the merger and the share exchange. In preparing the Man board materials, Perella Weinberg did not make any independent valuation or appraisal of the assets or liabilities (including any contingent, derivative or off-balance-sheet assets and liabilities) of Man or GLG, nor was it furnished with such valuations or appraisals. The Man board materials do not address Man’s underlying business decision to enter into the merger and the share exchange or the relative merits of the merger and the share exchange as compared with any other strategic alternatives which may be available to Man. Perella Weinberg provided its analysis for the information and assistance of Man in connection with, and for the purposes of, its evaluation of the merger and the share exchange.

 

The Man board materials were not intended to be and do not constitute a recommendation to any holder of Man ordinary shares or holder of shares of GLG common stock as to how to vote or otherwise act with respect to the merger and the share exchange or any other matter and do not in any manner address the prices at which shares of GLG common stock or Man ordinary shares will trade at any time. The Man board materials were necessarily based on financial, economic, market and other conditions as in effect on, and the information made available to Perella Weinberg as of, the date of the March materials, the April analyses, the May 3^rd materials and/or the May 13^th materials, as applicable.

 

The following is a brief summary of the material financial analyses performed by Perella Weinberg and reviewed by the Man Board and does not purport to be a complete description of the financial analyses performed by Perella Weinberg. The order of analyses described below does not represent the relative importance or weight given to those analyses by Perella Weinberg. Some of the summaries of the financial analyses include information presented in tabular format. In order to fully understand Perella Weinberg’s financial analyses, the tables must be read together with the text of each summary. The tables alone do not constitute a complete description of the financial analyses. Considering the data below without considering the full narrative description of the financial analyses, including the methodologies and assumptions underlying the analyses, could create a misleading or incomplete view of Perella Weinberg’s financial analyses. The public market trading price targets published by brokers are estimates of future prices, do not necessarily reflect current market trading prices for Man ordinary shares or GLG common stock, as applicable, and are subject to numerous uncertainties, including the future financial performance of Man or GLG, as applicable, and future financial market conditions.

 

March Materials

 

On March 9, 2010, Perella Weinberg initially discussed the following financial analyses with the Man Board.

 

Man Broker Price Targets Statistics

 

Perella Weinberg reviewed and analyzed recent public market trading price targets for Man ordinary shares prepared and published by selected brokers during the period from January 7, 2010 through March 1, 2010. These targets reflect each broker’s estimate of the future public market trading price of Man ordinary shares and are not discounted to reflect present values. The price targets of the selected brokers ranged from 300 pence to 390 pence.

 

Selected Publicly Traded Companies Analysis

 

Perella Weinberg reviewed and compared certain financial information, ratios and public market multiples for Man and GLG to corresponding financial information, ratios and public market multiples for the following publicly traded companies in the alternative asset management industry which, in the exercise of its professional judgment and based on its knowledge of such industry, Perella Weinberg determined to be the major publicly traded alternative asset managers pursuing primarily liquid strategies:

 

 

Perella Weinberg calculated and compared financial information, ratios and public market multiples of Man, GLG and each of the selected companies based on the closing price per share as of March 3, 2010, publicly available information and information Perella Weinberg obtained from company disclosure for historical information and public forecasts for forecasted information.

 

With respect to Man, GLG and each of the selected companies, Perella Weinberg reviewed, among other things:

 

 

Such multiples are summarized in the following table: