The Rodman & Renshaw offer for Cowen was for $7.00, which comes tonearly $100 million.  Cowen’s refusal of the offer noted that themerger would "distract Cowen’s management and employees in the currentchallenging environment when all efforts should be focused on servicingthe firm’s clients."

Cowen even noted that firm does not believe further discussion withRodman & Renshaw would be productive, nor does it intend to giveadditional consideration to the unsolicited proposal.

Rodman & Renshaw’s proposal was also not contingent on anyfinancing, according to the data.  After an informal offer was sentfrom CEO to CEO and that was denied, then Rodman & Renshaw decidedto send the buyout offer directly to the Cowen board of directors.This is also apparently not the first time the companies have discusseda possible merger this year.

The $7.00 buyout offer would come half in cash and half in Rodman &Renshaw stock.  The $100 million is actually right at $99.7 million andbased upon last week’s closing prices.  It would have been a 17%premium, but it would also be in the lower half of a 52-week tradingrange of $4.60 to $11.31.  Rodman & Renshaw’s stock trades at roughly 75% off of its 52-week highs.

Cowen shares are up over 12% at $6.76 and its market cap based uponcurrent prices is right above $96 million.  Rodman & Renshaw sharesare up almost 3% at $1.08.  What is interesting is that its market capis actually under $40 million.

Both companies here trade under last quarter’s net tangible values and under orright at net cash values after backing out all of their statedliabilities.  The problem with financial firms right now is that WallStreet and Main Street have trouble trusting each others’ books.  Rodman & Renshaw also goes back and forth from net profits to net losses, yet Cowen has been running at losses for most of the recent periods and is expected by analysts to continue seeing losses during the current time.

We wouldn’t even be too surprised if the role of the cat and mouse changes here.  You never know, the cat was maybe interested in being the mouse the whole time.

Jon C. Ogg
December 8, 2008

Sandler O’Neill & Partners, L.P. will act as lead underwriter for the offering, and Rodman & Renshaw, Fox-Pitt Kelton, and Paulson Investment Company will act as co-underwriters for the offering.  Enthrust will continue to operate Rodman & Renshaw’s current business under the leadership of Rodman & Renshaw’s executive management team. Enthrust intends to change its name to Rodman & Renshaw Capital Group, Inc.  Rodman & Renshaw is a full service boutique investment bank.  Its AcumenBioFin(TM) division is an investment banking firm to the biotechnology sector, as well as a leader in the PIPE (private investment in public equity) and RD (registered direct placements) transaction markets.

R&R posted 2006 revenues of $63.958 million, and net income before unrealized gains from investments was $16.518 million.  For the forst quarter of 2007, R&R posted $20.69 million in revenues and net income before a $1 million reclassification charge of $6.82 million.  Due to the nature of a boutique operation and deal participation, these charges and items look like they will keep earnings on a net-net basis a bit volatile and that is quite normal for companies in this sector.

Jon C. Ogg
July 19, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.