Babcock & Brown to terminate BCM management agreement
Babcock & Brown (B&B) has announced it will terminate its management rights with Babcock & Brown Capital (BBC).
B&B will now help BBC to conduct a review of its asset portfolio, which could lead to a change of control of BBC or its underlying assets. B&B said it has already received expressions of interest in BBC.
After the termination of the agreement, B&B will receive a payment of $32.5 million. It will also receive $12.5 million for the termination of the preferred advisory mandate and $5 million for services related to the sale review process, both on the condition of a change of control in BBC prior to April 2010.
Michael Larkin, the chief executive of B&B, said the agreement is in line with the group’s commitment to remove the gap between the underlying asset values and the respective trading prices of the group’s listed funds.
The resolution to terminate the management agreement will be put to shareholders in a meeting held before February 28.
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