What happened
Shares of Pzena Investment Management (PZN) had rocketed nearly 46% higher as of 10:07 a.m. ET today after the company announced that it plans to go private.
So what
Pzena will merge into a newly created subsidiary of its parent company in order to go private. Shareholders of Pzena Class A common stock will receive $9.60 per share in cash, representing a premium of 49% to the company's closing stock price on July 26, and a roughly 46% premium over the 90-calendar-day weighted average price.
"We are excited to begin this new chapter for our firm after 15 years as a public company," CEO Richard Pzena said in the announcement.
He added: "We believe the transaction is in the best interest of Pzena's Class A stockholders, and will enhance our ability to achieve investment excellence on behalf of our clients."
Since going public in late 2007, even after the huge jump today Pzena still trades down more than 52% all time, so this was clearly not a high-returning stock for shareholders.
Along with the announcement, Pzena also reported its second-quarter earnings results, including $0.15 in diluted earnings per share on total revenue of nearly $48.7 million. Assets under management at the end of the quarter were about $49.5 billion, down close to 7% from the first quarter of the year.
Pzena intends to maintain its quarterly dividend of $0.03 for the third quarter of the year. The company is expected to formally go private before the end of 2022.
Now what
I don't think there is a lot to analyze here. This is a fairly small company with suboptimal returns over its public life that is opting to go private.
