In a press release issued today, MSCI Inc. (NYSE: MXB), a leading global provider of investment decision support tools, and RiskMetrics Group, Inc. (NYSE: RISK), a leading provider of risk management and corporate governance products and services to the global financial community, jointly announced today that they have entered into a definitive merger agreement whereby MSCI will acquire RiskMetrics in a cash and stock transaction valued at $21.75 per share based on MSCI’s closing price of $29.98 per share on Friday, February 26, 2010, or approximately $1.55 billion.
Okay, so not the stuff of exciting news for individual investors but for those of us involved in proxy voting and governance matters, this is somewhat interesting.
A little background is probably in order. Risk Metrics acquired a company called Institutional Shareholder Services, usually referred to as ISS. Started some 20 odd years ago by Robert A.G. Monks and Nell Minow, ISS rapidly became a major influence in all things corporate governance-wise. The company made its business by analyzing all issues coming to a shareholder vote globally.
The company was a bit of a hot potato, exchanging hands a number of times: Monks/Minow et al to Jamie Hurd; Hurd to Thomson Publishing; Thomson to the Proxy Monitor and a private equity consortium; Proxy Monitor to Risk Metrics. Over the last several years, Risk Metrics has been on an acquisition tear, picking up a number of research firms for handsome sums. Along the way, Risk Metrics went public and then put itself on the auction block. At each step, the valuations of this proxy advisory company jumped dramatically. All of this bring us to the events of today.
MSCI, the company that brings us the EAFE Index as well as any number of other analytic tools will hopefully bring some stability to this industry. More importantly, questions about Risk Metrics independent judgment on its proxy voting recommendations where the company also had other business ties with those same companies will hopefully be put to rest. We will see.
