Rodman & Renshaw Ends Cowen Group Deal Pursuit

NEW YORK (AP) — Investment bank Rodman & Renshaw Capital Group Inc. said Wednesday it will no longer pursue a deal with rival Cowen Group Inc., due to current market conditions.

In December, New York-based Rodman & Renshaw offered to buy rival New York firm Cowen Group for nearly $100 million, or $7 per share, in what was an unsolicited bid. Cowen rejected the offer, saying the proposal would not boost the value of the company and could distract from serving the firm's clients.

Rodman & Renshaw insisted that acquiring Cowen would substantially boost its earnings, powered by cost savings and new revenue. The company also said it was willing to operate the combined businesses under the Cowen name and retain members of the company's management team.

The landscape of the investment banking world has changed dramatically in the past six months, beginning with Lehman Brothers Holdings Inc. filing for bankruptcy protection at the end of September amid the worsening credit crisis. That news sent Merrill Lynch & Co. into the arms of Bank of America Corp. in a $50 billion deal.

And as there was concern among investors that the stand-alone investment bank model would not be able to survive the ongoing credit crisis, both Morgan Stanley and Goldman Sachs Group Inc. sought approval to become bank holding companies. That change in status allows them to build up a large deposit base and gives them permanent access to funding from the Federal Reserve.