Freedom Holding rejects deal with American investment bank Maxim Group
Freedom Holding Corp. has rejected the deal with Maxim Group, an American investment group, according to the company’s statement on the U.S. Securities and Exchange Commission (SEC) website.
«The company and the sellers agreed that the deal arranged in February 2023 can’t be fulfilled by December 31, 2023. In this regard, on October 31, both the company and the sellers decided to terminate the purchase agreement by mutual consent of the parties,» the company said in a statement on the SEC website.
In February 2023, Freedom announced that it would acquire Maxim Group and its subsidiary Maxim Financial Advisors for $400 million. The deal was supposed to be closed after official approval by U.S. regulators.
Freedom Holding Corp. wanted to strengthen its international expansion at the expense of its new asset which was positioned as a leading investment bank with a wide range of services. The company planned to use Maxim Group’s expertise in Asia, Greece, Israel and Western Europe in order to boost its brokerage business and global distribution network. At the time Freedom Holding Corp. noted that over the past ten years, Maxim Group has raised more than $80.6 billion as an underwriter. Given the holding’s expansion plans, this had been a crucial factor.
«The past twelve months were quite difficult for the initial public offerings industry; the market has significantly shrunk. Perhaps, we will resume these negotiations in the near future but on other conditions with fewer investments. All the money we save will be invested to boost our business in Kazakhstan and other regions,» CEO and major shareholder of Freedom Holding Corp. Timur Turlov said. In the first quarter of the 2024 fiscal year (ending on June 30), Freedom Holding Corp. reported an 83.3% increase in revenue to $316.2 million. This growth was mainly driven by an increase in interest income, revenue from stock market transactions and fees from insurance companies within the holding, although the company also reported some increase in losses in the derivatives market.
