UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

(Amendment No. 1)

 

PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES

EXCHANGE ACT OF 1934

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

þ  Preliminary Proxy Statement

o  Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

o  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to Rule 14a-12

 

FREEDOM ACQUISITION HOLDINGS, INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

Equity interests of GLG Partners Limited, GLG Holdings Limited, Mount Granite Limited, Albacrest Corporation, Liberty Peak Ltd., GLG Partners Services Limited, Mount Garnet Limited, Betapoint Corporation, Knox Pines Ltd., GLG Partners Asset Management Limited and GLG Partners (Cayman) Limited (collectively, the “Acquired Companies”).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

¹ Estimated solely for the purpose of calculating the registration fee pursuant to Section 14(g)(1)(A)(i) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), calculated based on $30.70 per $1,000,000 of the book value of the equity interests of the Acquired Companies to be acquired by the registrant in the transaction.

 

FREEDOM ACQUISITION HOLDINGS, INC.
1114 Avenue of the Americas, 41st Floor
New York, New York 10036

 

PROXY STATEMENT FOR SPECIAL MEETING OF

STOCKHOLDERS OF FREEDOM ACQUISITION HOLDINGS, INC.

 

To the Stockholders of Freedom Acquisition Holdings, Inc.:

 

You are cordially invited to attend a special meeting of the stockholders of Freedom Acquisition Holdings, Inc., or Freedom, which will be held at   :00 a.m./p.m., Eastern Time, on             , 2007, at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, New York 10166.

 

At this important meeting, you will be asked to consider and vote upon the following proposals:

 

 

 

 

 

 

 

 

 

 

The board of directors of Freedom has fixed the close of business on August   , 2007, as the record date for the determination of stockholders entitled to notice of and to vote at the special meeting and at any adjournment or postponement thereof. A list of stockholders entitled to vote as of the record date at the special meeting will be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours for a period of ten calendar days before the special meeting at the principal place of business of Freedom at 1114 Avenue of the Americas, 41st Floor, New York, New York 10036 and at the time and place of the meeting during the duration of the meeting.

 

The affirmative vote of a majority of the shares of Freedom common stock outstanding as of the record date is required to approve the acquisition proposal, provided that the holders of less than 20% of the shares of Freedom common stock that were issued in its initial public offering vote against the acquisition proposal and elect a redemption of their shares.

 

Assuming the acquisition proposal is approved by Freedom stockholders, the affirmative vote of a majority of the shares of Freedom common stock outstanding as of the record date is required to approve the pre-closing certificate amendment proposals and the post-closing certificate amendment proposal.

 

The adoption of the incentive plan proposal and the adjournment proposal will require the affirmative vote of a majority of the shares of Freedom common stock represented in person or by proxy and entitled to vote thereon at the special meeting.

 

Each of the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal and the incentive plan proposal are conditioned upon the approval of the other proposals (subject to Freedom’s right to waive any such condition) and, in the event one or more of those proposals does not receive the necessary vote to approve that proposal, only the adjournment proposal will be presented at the special meeting for adoption. Notwithstanding the foregoing, it is a condition to the closing of the acquisition for both Freedom and the GLG Shareowners under the purchase agreement that each of these proposals is approved by Freedom’s stockholders.

 

In addition, each Freedom stockholder who holds shares of common stock issued in Freedom’s initial public offering (whether such shares were acquired pursuant to such initial public offering or afterwards) has the right to vote against the acquisition proposal and, at the same time, elect that Freedom redeem all such stockholder’s shares, which we refer to as the redemption election shares, for cash equal to a pro rata portion of the trust account in which a substantial portion of the net proceeds of Freedom’s initial public offering is deposited, including interest. However, if the holders of 10,560,000 or more shares of Freedom common stock issued in Freedom’s initial public offering, an amount equal to 20% or more of the total number of shares issued in Freedom’s initial public offering, vote against the acquisition and elect redemption of their shares for a pro rata portion of the trust account, then Freedom will not be able to consummate the acquisition, regardless of whether a majority of the outstanding shares of Freedom common stock vote in favor of the acquisition proposal. Based on the amount of cash held in the trust account as of June 30, 2007, without taking into account any interest accrued after such date, a stockholder who votes against the acquisition proposal and elects to redeem its shares will be entitled to redeem shares of Freedom common stock that it holds for approximately $9.88 per share. If the acquisition is not completed, then the redemption election shares will not be redeemed for cash, even if a stockholder who voted against the acquisition elected redemption. Freedom will have sufficient funds in the trust account (after giving effect to the co-investment by its sponsors described below and the payment of the cash purchase price of the acquisition) to pay the redemption price for the redemption election shares, even if it must redeem 19.99% of the shares of common stock issued in Freedom’s initial public offering.

 

Freedom’s sponsors, Berggruen Holdings North America Ltd. and Marlin Equities II, LLC, and all of its directors, who purchased or received shares of Freedom common stock prior to its initial public offering, beneficially own an aggregate of approximately 18.5% of the outstanding shares of Freedom common stock as

of August 1, 2007, and all of these stockholders have agreed to vote the shares acquired prior to the initial public offering in accordance with the vote of the majority in interest of all other Freedom stockholders on the acquisition proposal. In addition, each of Freedom’s sponsors and independent directors, whom we refer to collectively as the founders, has previously agreed that if he or it acquires shares of Freedom common stock in or following the initial public offering, he or it will vote all such acquired shares in favor of the acquisition proposal. In addition, Berggruen Holdings and Marlin Equities, which beneficially own approximately 18.3% of the outstanding shares of Freedom common stock as of August 1, 2007, have entered into a founders agreement with certain of the equity holders of GLG Partners LP and certain affiliated entities that requires them to vote for the adoption of the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal, the incentive plan proposal and, if necessary, the adjournment proposal.

 

After careful consideration of the terms and conditions of the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal, the incentive plan proposal and the adjournment proposal, the board of directors of Freedom has determined that such proposals and the transactions contemplated thereby are fair to and in the best interests of Freedom and its stockholders.

 

The board of directors of Freedom unanimously recommends that you vote or give instruction to vote “FOR” adoption of the acquisition proposal, each of the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal, the incentive plan proposal and, if necessary, the adjournment proposal. When you consider the recommendation of Freedom’s board of directors, you should keep in mind that certain of Freedom’s directors, officers and sponsors and GLG’s principals, trustees of related trusts and GLG’s key personnel have interests in the acquisition which are described in the accompanying proxy statement that are different from, or in addition to, your interests as a stockholder.

 

Enclosed is a notice of special meeting and proxy statement containing detailed information concerning each of the proposals discussed above. Whether or not you plan to attend the special meeting, we urge you to read this material carefully. I look forward to seeing you at the meeting.

 

Sincerely,

 

Nicolas Berggruen

President and Chief Executive Officer

 

YOUR VOTE IS IMPORTANT.  WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY CARD AS SOON AS POSSIBLE IN THE ENVELOPE PROVIDED. IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, IT WILL BE VOTED “FOR” EACH OF THE PROPOSALS. AN ABSTENTION, SINCE IT IS NOT AN AFFIRMATIVE VOTE IN FAVOR OF A PROPOSAL, WILL HAVE THE SAME EFFECT AS A VOTE AGAINST (1) THE ACQUISITION PROPOSAL (BUT WILL NOT HAVE THE EFFECT OF REDEEMING YOUR SHARES FOR A PRO RATA PORTION OF THE TRUST ACCOUNT IN WHICH A SUBSTANTIAL PORTION OF THE NET PROCEEDS OF FREEDOM’S INITIAL PUBLIC OFFERING ARE HELD, UNLESS AN AFFIRMATIVE ELECTION VOTING AGAINST THE ACQUISITION PROPOSAL IS MADE AND AN AFFIRMATIVE ELECTION TO REDEEM SUCH SHARES OF COMMON STOCK IS MADE NO LATER THAN IMMEDIATELY PRIOR TO THE VOTE ON THE ACQUISITION PROPOSAL AT THE SPECIAL MEETING ON THE PROXY CARD), (2) EACH OF THE PRE-CLOSING CERTIFICATE AMENDMENT PROPOSALS, (3) THE POST-CLOSING CERTIFICATE AMENDMENT PROPOSAL, (4) THE INCENTIVE PLAN PROPOSAL AND (5) THE ADJOURNMENT PROPOSAL.

 

SEE “RISK FACTORS” FOR A DISCUSSION OF VARIOUS FACTORS THAT YOU SHOULD CONSIDER IN CONNECTION WITH THE PROPOSED ACQUISITION OF GLG PARTNERS LP AND CERTAIN AFFILIATED ENTITIES SINCE, UPON THE CONSUMMATION OF THE ACQUISITION, THE OPERATIONS AND ASSETS OF FREEDOM WILL ESSENTIALLY BE THOSE OF THE GLG PARTNERS LP AND CERTAIN AFFILIATED ENTITIES.

Freedom is soliciting the proxy represented by the enclosed proxy on behalf of its board of directors, and it will pay all costs of preparing, assembling and mailing the proxy materials. In addition to mailing out proxy materials, Freedom’s Chief Executive Officer, Chairman of the Board and other officers may solicit proxies by telephone or fax, each without receiving any additional compensation for his services. Freedom has requested brokers, banks and other fiduciaries to forward proxy materials to the beneficial owners of its common stock. Freedom has engaged             to solicit proxies for this special meeting. Freedom is paying             approximately $      for solicitation services, which amount includes a $      fixed solicitation fee and a per call fee estimated in the aggregate to be equal to $     .

 

This proxy statement is dated August   , 2007 and is first being mailed to Freedom stockholders on or about August   , 2007.

 

FREEDOM ACQUISITION HOLDINGS, INC.

1114 Avenue of the Americas, 41st Floor

New York, New York 10036

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS

To Be Held on             , 2007

 

TO THE STOCKHOLDERS OF FREEDOM ACQUISITION HOLDINGS, INC.:

 

NOTICE IS HEREBY GIVEN that a special meeting of stockholders, including any adjournments or postponements thereof, of Freedom Acquisition Holdings, Inc., a Delaware corporation (“Freedom”), will be held at  :00 a.m./p.m., Eastern Time, on             , 2007, at the offices of Greenberg Traurig, LLP, 200 Park Avenue, New York, NY 10166, for the following purposes:

 

1. To consider and vote upon a proposal to approve the acquisition by Freedom of GLG Partners Limited, GLG Holdings Limited, Mount Granite Limited, Albacrest Corporation, Liberty Peak Ltd., GLG Partners Services Limited, Mount Garnet Limited, Betapoint Corporation, Knox Pines Ltd., GLG Partners Asset Management Limited and GLG Partners (Cayman) Limited (each, an “Acquired Company” and collectively, the “Acquired Companies”), pursuant to the Purchase Agreement, dated as of June 22, 2007, by and among Freedom, FA Sub 1 Limited, FA Sub 2 Limited, FA Sub 3 Limited, Jared Bluestein, as the buyers’ representative, Noam Gottesman, as the sellers’ representative, Lehman (Cayman Islands) Ltd, Noam Gottesman, Pierre Lagrange, Emmanuel Roman, Jonathan Green, Leslie J. Schreyer, in his capacity as trustee of the Gottesman GLG Trust, G&S Trustees Limited, in its capacity as trustee of the Lagrange GLG Trust, Jeffrey A. Robins, in his capacity as trustee of the Roman GLG Trust, Abacus (C.I.) Limited, in its capacity as trustee of the Green GLG Trust, Lavender Heights Capital LP, Ogier Fiduciary Services (Cayman) Limited, in its capacity as trustee of the Green Hill Trust, Sage Summit LP and Ogier Fiduciary Services (Cayman) Limited, in its capacity as trustee of the Blue Hill Trust (collectively, the “GLG Shareowners”), and the transactions contemplated thereby, whereby FA Sub 1 Limited, FA Sub 2 Limited and FA Sub 3 Limited, each a newly formed, wholly owned subsidiary of Freedom, will acquire all of the outstanding equity interests of the Acquired Companies, and each Acquired Company will become a subsidiary of Freedom;

 

2. To consider and vote upon four proposals to amend the amended and restated certificate of incorporation of Freedom, which we refer to as the certificate of incorporation, in connection with the consummation of the acquisition:

 

 

 

 

 

 

 

 

3. To consider and vote upon a proposal to amend the certificate of incorporation to remove, effective after the consummation of the acquisition, (1) certain provisions of Article Third and Article Fourth, paragraph B and (2) the entirety of Article Fifth of the certificate of incorporation, all of which relate to the operation of Freedom as a blank check company prior to the consummation of a business combination, and to add provisions regarding dividends and distributions;

 

4. To consider and vote upon a proposal to approve the adoption of the 2007 Long-Term Incentive Plan (the “LTIP”) pursuant to which Freedom will reserve           shares of common stock for issuance pursuant to the LTIP;

 

5. To consider and vote upon a proposal to authorize the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes at the time of the special meeting to adopt the acquisition proposal, each of the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal or the incentive plan proposal; and

 

6. To consider and vote upon such other business as may properly come before the meeting or any adjournment or postponement thereof.

 

The board of directors of Freedom has fixed the close of business on August   , 2007 as the record date for the determination of stockholders entitled to notice of and to vote at the special meeting and at any adjournment or postponement thereof. Only the holders of record of Freedom common stock on the record date are entitled to have their votes counted at the Freedom special meeting and any adjournments or postponements thereof.

 

We expect that the GLG Shareowners will hold approximately 72% of the outstanding shares of Freedom common stock on a fully diluted basis immediately following the consummation of the acquisition, based on the number of shares of Freedom common stock outstanding as of June 30, 2007 and after giving effect to the co-investment by Freedom’s sponsors for 5,000,000 units, each consisting of one share of common stock and one warrant, and assuming (1) the exchange into Freedom common stock of all exchangeable shares issued in connection with the acquisition, (2) the exercise of all put and call rights with respect to shares of FA Sub 1 Limited described below and (3) no election of redemption of shares by Freedom stockholders. Specifically, the total consideration for the acquisition is comprised of the following, which is subject to certain adjustments:

 

 

Shareowners upon the consummation of the acquisition. Each of the ordinary shares to be issued by FA Sub 1 Limited may be put by the holder to, or called by, Freedom immediately following consummation of the acquisition in exchange for one share of Freedom common stock. Each Exchangeable Share is exchangeable at any time at the election of the holder for one share of Freedom common stock; and

 

 

We will not transact any other business at the special meeting, except for business properly brought before the special meeting, or any adjournment or postponement thereof, by our board of directors.

 

Your vote is important. Whether you plan to attend the special meeting or not, please sign, date and return your proxy card as soon as possible to make sure that your shares are represented at the special meeting. If you are a stockholder of record of Freedom common stock, you may also cast your vote in person at the special meeting. If your shares are held in an account at a brokerage firm or bank, you must instruct your broker or bank on how to vote your shares.

 

The board of directors of Freedom unanimously recommends that you vote “FOR” each of the proposals that are described in the accompanying proxy statement. When you consider the recommendation of Freedom’s board of directors, you should keep in mind that certain of Freedom’s directors, officers and sponsors and GLG’s principals, trustees of related trusts and GLG’s key personnel have interests in the acquisition which are described in the accompanying proxy statement that are different from, or in addition to, your interests as a stockholder.

 

By Order of the Board of Directors,

 

Nicolas Berggruen

President and Chief Executive Officer

 

August   , 2007

TABLE OF CONTENTS

 

 

In this proxy statement, the term “GLG” refers to the combined business and operations of the Acquired Companies and their subsidiaries and affiliates, including GLG Partners LP, GLG Partners Services LP, Laurel Heights LLP and Lavender Heights LLP, and the term “GLG Funds” refers to the investment funds that GLG manages, operates and advises.

 

Nothing in this proxy statement should in any way be construed as, or is intended to be, a solicitation for, or an offer to provide, investment advisory services.

 

Why am I receiving this proxy statement?

 

Freedom, FA Sub 1 Limited, FA Sub 2 Limited, FA Sub 3 Limited and the GLG Shareowners have agreed to the acquisition by Freedom, through FA Sub 1 Limited, FA Sub 2 Limited and FA Sub 3 Limited, of the Acquired Companies under the terms of the Purchase Agreement, dated as of June 22, 2007, which is described in this proxy statement. A copy of the purchase agreement is attached to this proxy statement as Annex A. We encourage you to review the entire purchase agreement carefully.

 

In order to complete the acquisition, (1) a majority of the shares of Freedom common stock issued and outstanding as of August   , 2007, the record date, must be voted for the acquisition proposal, and (2) less than 20% of the shares of Freedom common stock issued in our initial public offering must be voted against the acquisition proposal and elect a redemption of their shares.

 

What is being voted on?

 

You are being asked to vote on eight proposals.

 

The first proposal is to approve the acquisition by FA Sub 1 Limited, FA Sub 2 Limited and FA Sub 3 Limited, Freedom’s wholly owned subsidiaries, of the Acquired Companies from the GLG Shareowners pursuant to the purchase agreement.

 

The second through fifth proposals are to approve amendments to Freedom’s certificate of incorporation effective immediately prior to the consummation of the acquisition to:

 

 

 

 

 

 

The sixth proposal is to approve amendments to Freedom’s certificate of incorporation to remove, effective after the consummation of the acquisition, certain provisions of Article Third and Article Fourth,

paragraph B and the entirety of Article Fifth relating to the operation of Freedom as a blank check company prior to the consummation of a business combination, and to add provisions regarding dividends and distributions.

 

The seventh proposal is to approve the adoption of the 2007 Long-Term Incentive Plan, which we refer to as the LTIP, pursuant to which           shares of Freedom common stock will be reserved for issuance in accordance with the terms of the LTIP.

 

The eighth proposal is to approve the adjournment of the special meeting to a later date or dates, if necessary, to permit further solicitation and vote of proxies in the event there are insufficient votes at the time of the special meeting to adopt the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal or the incentive plan proposal.

 

A form of Freedom’s restated certificate of incorporation, as it would appear if the pre-closing certificate amendment proposals (with deletions denoted by italics and strikeovers and insertions denoted by italics and underlines) and the post-closing certificate amendment proposal (with deletions denoted by bold italics and strikeovers and insertions denoted by bold italics and underlines) are all effected, is attached as Annex H. The LTIP has been approved by Freedom’s board of directors and will be effective upon consummation of the acquisition, subject to stockholder approval of the LTIP. A copy of the LTIP is attached as Annex I.

 

Each of the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal and the incentive plan proposal are conditioned upon the approval of the other proposals (subject to Freedom’s right to waive any such condition) and, in the event one or more of those proposals does not receive the necessary vote to approve that proposal, then only the adjournment proposal will be presented at the special meeting for adoption. Notwithstanding the foregoing, it is a condition to the closing of the acquisition for both Freedom and the GLG Shareowners under the purchase agreement that each of these proposals is approved by Freedom’s stockholders.

 

You are invited to attend the special meeting to vote on the proposals described in this proxy statement. However, you do not need to attend the meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card. Your vote is important. Freedom encourages you to vote as soon as possible after carefully reviewing this proxy statement.

 

This proxy statement provides you with detailed information about the proposed acquisition, the pre-closing and post-closing amendments to the certificate of incorporation, the LTIP, the adjournment proposal and the special meeting of stockholders. We encourage you to carefully read this entire document, including the attached annexes. YOU SHOULD ALSO CAREFULLY CONSIDER THOSE FACTORS DESCRIBED UNDER THE HEADING “RISK FACTORS”.

 

Why is Freedom proposing the acquisition, the amendments to its certificate of incorporation and the adoption of the LTIP?

 

Freedom is a blank check company formed specifically as a vehicle for the acquisition of or merger with a business whose fair market value is equal to at least 80% of the net assets of Freedom plus the proceeds of the co-investment by its sponsors (excluding deferred underwriting discounts and commissions of approximately $18.0 million). Freedom has been in search of a business combination partner since its initial public offering occurred in December 2006. Freedom’s board of directors believes that GLG presents a unique opportunity for Freedom because of its variety of investment products, advisory services, growth prospects and investment management team, among other factors. As a result, Freedom believes that the acquisition of GLG will provide Freedom stockholders with an opportunity to acquire, and participate in, a company with significant growth potential, particularly as its business continues to grow and expand into the United States and other dynamic global markets. Several of the amendments to Freedom’s certificate of incorporation are being undertaken because the proposed issuances in connection with the acquisition and the adoption of the LTIP require a greater number of shares of Freedom common and preferred stock to be issued than is currently authorized, and upon consummation of the acquisition, management desires the name of the business to reflect its operations and for the certificate of incorporation to include certain provisions relevant to a publicly traded

operating company. The adoption of the LTIP is being undertaken because Freedom’s board of directors deems it beneficial for Freedom going forward to attract, motivate and retain highly skilled investment professionals and others important to grow GLG’s business following the acquisition.

 

What vote is required in order to approve the acquisition proposal?

 

The approval of the acquisition of the Acquired Companies will require the affirmative vote of a majority of the shares of Freedom common stock outstanding as of the record date.

 

In addition, each Freedom stockholder who holds shares of common stock issued in Freedom’s initial public offering (whether such shares were acquired pursuant to such initial public offering or afterwards) has the right to vote against the acquisition proposal and, at the same time, elect that Freedom redeem such stockholder’s shares, which we refer to as the redemption election shares, for cash equal to a pro rata portion of the trust account, including interest, in which a substantial portion of the net proceeds of Freedom’s initial public offering is deposited. Stockholders who seek to exercise this redemption right must submit their vote against adoption of the acquisition proposal and their election that Freedom redeem their shares for cash no later than immediately prior to the vote on the acquisition proposal at the special meeting. Based on the amount of cash held in the trust account as of June 30, 2007, without taking into account any interest accrued after such date, a stockholder who votes against the acquisition proposal and elects to redeem its shares will be entitled to redeem shares of Freedom common stock that it holds for approximately $9.88 per share. These shares will be redeemed for cash only if the acquisition is completed.

 

However, if the holders of 10,560,000 or more shares of common stock issued in Freedom’s initial public offering, an amount equal to 20% or more of the total number of shares issued in the initial public offering, vote against the acquisition and elect redemption of their shares for a pro rata portion of the trust account, then Freedom will not be able to consummate the acquisition, regardless of whether a majority of the outstanding shares of Freedom common stock vote in favor of the acquisition proposal. If the acquisition is not completed, then redemption election shares will not be redeemed for cash, even if a stockholder who voted against the acquisition elected redemption. In connection with any redemption request, you may be asked to submit a physical stock certificate, which you would need to request from your broker if your shares are held in “street name”. In addition, you may also be required to submit proof of your vote against the acquisition proposal and of your election to redeem your shares for cash.

 

Each of Freedom’s sponsors, Berggruen Holdings North America Ltd. and Marlin Equities II, LLC, and all of its directors who purchased or received shares of Freedom common stock prior to its initial public offering, which we collectively refer to herein as the founders, beneficially own an aggregate of approximately 18.5% of the outstanding shares of Freedom common stock as of August 1, 2007. All of these persons have agreed to vote all of these shares which were acquired prior to the public offering in accordance with the vote of the majority in interest of all other Freedom stockholders on the acquisition proposal. In addition, each of Freedom’s founders has previously agreed that if he or it acquires shares of Freedom common stock in or following the initial public offering, he or it will vote all such acquired shares in favor of the acquisition proposal. In addition, Berggruen Holdings and Marlin Equities, which beneficially own approximately 18.3% of the outstanding shares of Freedom common stock as of August 1, 2007, have entered into a founders agreement with certain of the GLG Shareowners that requires them to vote for the adoption of the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal, the incentive plan proposal and, if necessary, the adjournment proposal.

 

Certain GLG Funds own in the aggregate 407,615 shares of Freedom common stock. The GLG principals control the voting of the shares of Freedom common stock owned by these GLG Funds by virtue of GLG entities acting as the manager and investment manager of these GLG Funds. Although there is no agreement with respect to the voting of these shares for the proposals, Freedom has been advised by GLG that GLG intends to cause these GLG Funds to vote the shares of Freedom common stock owned by them in accordance with the vote of a majority in interest of all Freedom stockholders on the acquisition proposal, subject to the approval of such vote by the board of directors of each such GLG Fund.

What vote is required in order to approve the name change proposal?

 

The approval of the amendment to the certificate of incorporation to change Freedom’s corporate name to “GLG Partners, Inc.” immediately prior to the consummation of the acquisition will require the affirmative vote of a majority of the shares of Freedom common stock issued and outstanding as of the record date. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to approve the authorized share proposal?

 

The approval of the pre-closing amendment to the certificate of incorporation to increase the number of authorized shares of Freedom capital stock from 201,000,000 shares to 1,150,000,000 shares, including: (1) increasing Freedom’s authorized common stock from 200,000,000 to 1,000,000,000 shares and (2) increasing Freedom’s authorized preferred stock from 1,000,000 to 150,000,000 shares, of which it is expected that 58,904,993 shares (subject to adjustment) will be designated by the board of directors as a new series of Freedom preferred stock titled Series A voting preferred stock, will require the affirmative vote of a majority of the shares of Freedom common stock issued and outstanding as of the record date. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to approve the super-majority vote proposal?

 

The approval of the pre-closing amendment to the certificate of incorporation to increase from the affirmative vote of a majority of the quorum present at the meeting or a majority of the outstanding shares of Freedom common stock, as the case may be, to the affirmative vote of at least 662/3% of the combined voting power of all outstanding shares of Freedom capital stock entitled to vote generally, voting together as a single class, the vote required for Freedom’s stockholders to (1) adopt, alter, amend or repeal the by-laws, (2) remove a director (other than directors elected by a series of preferred stock of Freedom, if any, entitled to elect a class of directors) from office, with or without cause, and (3) amend, alter or repeal certain provisions of the certificate of incorporation which require a stockholder vote higher than a majority vote, including the amendment provision itself, or to adopt any provision inconsistent with those provisions, will require the affirmative vote of a majority of Freedom common stock issued and outstanding as of the record date. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to approve the other pre-closing certificate amendments proposal?

 

The approval of the pre-closing amendment of certain other provisions of the certificate of incorporation relating to, among other things, Freedom’s registered agent, the ability to call special meetings of stockholders, the scope of the indemnification of officers and directors and certain other ministerial amendments, as more fully set forth in the form of restated certificate of incorporation attached as Annex H, will require the affirmative vote of a majority of Freedom common stock issued and outstanding as of the record date. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to approve the post-closing certificate amendment proposal?

 

The approval of the amendments to the certificate of incorporation to remove, effective after the consummation of the acquisition, certain provisions of Article Third and Article Fourth, paragraph B and the entirety of Article Fifth relating to the operation of Freedom as a blank check company prior to the consummation of a business combination, and to add provisions regarding dividends and distributions, will

require the affirmative vote of a majority of Freedom common stock issued and outstanding as of the record date. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to approve the incentive plan proposal?

 

The approval of the adoption of the LTIP will require the affirmative vote of a majority of the shares of Freedom common stock represented in person or by proxy and entitled to vote thereon at the special meeting. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

What vote is required in order to adopt the adjournment proposal?

 

The approval of the adjournment proposal will require the affirmative vote of a majority of the shares of Freedom common stock represented in person or by proxy and entitled to vote thereon at the special meeting. Berggruen Holdings and Marlin Equities have agreed to, and Freedom has been advised that each of its other founders intends and GLG intends to cause the GLG Funds to, vote all of his or its shares of Freedom common stock in favor of this proposal.

 

Did Freedom’s board of directors make a determination as to the value of GLG?

 

While they did not identify a specific value for GLG, Freedom’s directors determined that the fair market value of GLG is in excess of 80% of Freedom’s net assets plus the proceeds of the co-investment by its sponsors (excluding deferred underwriting discounts and commissions of approximately $18.0 million).

 

Did Freedom’s board of directors obtain a fairness opinion in connection with its approval of the purchase agreement?

 

No. During the process leading up to the signing of the purchase agreement, Freedom’s board of directors discussed the option of obtaining a fairness opinion of the proposed acquisition by Freedom of GLG. The board of directors of Freedom determined not to obtain a fairness opinion in connection with the approval of the purchase agreement for the following reasons: (1) its internal ability to value the business against public comparables and other market index measures; (2) its general exercise of its business judgment; and (3) its knowledge that the valuation of the proposed acquisition would be tested by the market and factors that Freedom’s public stockholders deem relevant and that 20% of the public stockholders could effectively veto the combination if they did not deem such valuation to be fair.

 

If I am not going to attend the Freedom special meeting of stockholders in person, should I return my proxy card instead?

 

Yes. After carefully reading and considering the information contained in this proxy statement, please complete and sign your proxy card. Then return the enclosed proxy card in the return envelope provided as soon as possible, so that your shares may be represented at the special meeting.

 

What will happen if I abstain from voting or fail to vote?

 

An abstention, since it is not an affirmative vote in favor of a particular proposal but adds to the number of shares present in person or by proxy, will have the same effect as a vote against (1) the acquisition proposal (but will not have the effect of redeeming your shares for a pro rata portion of the trust account in which a substantial portion of the net proceeds of Freedom’s initial public offering are held), (2) each of the pre-closing certificate amendment proposals, (3) the post-closing certificate amendment proposal, (4) the incentive plan proposal and (5) the adjournment proposal.

A failure to vote will have no impact upon the approval of the matters referred to in clauses (4) and (5) above, but, as the acquisition proposal, each of the pre-closing certificate amendment proposals and the post-closing certificate amendment proposal require the affirmative vote of a majority of all outstanding shares of Freedom common stock, a failure to vote will have the effect of a vote against such acquisition proposal and each of the pre-closing and post-closing certificate amendment proposals. Failure to vote will not have the effect of electing to redeem your shares for a pro rata portion of the trust account.

 

What do I do if I want to change my vote?

 

If you wish to change your vote, please send a later-dated, signed proxy card to           prior to the date of the special meeting or attend the special meeting and vote in person. You also may revoke your proxy by sending a notice of revocation to           at          , provided such revocation is received prior to the special meeting.

 

If my shares are held in “street name” by my broker, will my broker vote my shares for me?

 

If your broker holds your shares in its name and you do not give the broker voting instructions, under the applicable stock exchange rules, your broker may not vote your shares on the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal or the incentive plan proposal. If you do not give your broker voting instructions and the broker does not vote your shares, this is referred to as a “broker non-vote”. Broker non-votes are counted for purposes of determining the presence of a quorum and will have the same effect as votes “AGAINST” the acquisition proposal, each of the pre-closing certificate amendment proposals and the post-closing certificate amendment proposal, but will not be counted towards the vote total for the incentive plan proposal or adjournment proposal. However, a “broker non-vote” that has the effect of voting against the acquisition proposal will not have the effect of electing to redeem your shares for a pro rata portion of the trust account.

 

What is the quorum requirement?

 

A quorum of stockholders is necessary to hold a valid meeting. A quorum will be present if at least a majority of the outstanding shares of Freedom common stock are represented by stockholders present at the meeting or by proxy. On the record date, there were 64,800,003 shares of Freedom common stock outstanding and entitled to vote.

 

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker, bank or other nominee) or if you vote in person at the special meeting. Abstentions and broker non-votes will be counted towards the quorum requirement. If there is no quorum, a majority of the votes present at the special meeting may adjourn the special meeting to another date.

 

Will I receive anything in the acquisition?

 

If the acquisition is completed and you vote your shares for the acquisition proposal, you will continue to hold the Freedom common stock and warrants that you currently own. If the acquisition is completed but you have voted your shares against the acquisition proposal and have elected a redemption, your Freedom common stock will be cancelled and you will receive cash equal to a pro rata portion of the trust account, which, as of June 30, 2007, without taking into account any interest accrued after such date, was equal to approximately $9.88 per share. However, you will continue to hold the warrants that you currently own.

 

Do I have redemption rights in connection with the acquisition?

 

If you hold shares of common stock issued in Freedom’s initial public offering (whether such shares were acquired pursuant to such initial public offering or afterwards), then you have the right to vote against the acquisition proposal and elect that Freedom redeem your shares of common stock for a pro rata portion of the trust account in which a substantial portion of the net proceeds of its initial public offering are held. These rights to vote against the acquisition and elect redemption of your shares for a pro rata portion of the trust

account are referred to in this proxy statement as redemption rights, and each share of common stock as to which such election is made is referred to as a redemption election share.

 

If I have redemption rights, how do I exercise them?

 

If you wish to exercise your redemption rights, you must submit your vote against the acquisition and your election that Freedom redeem your shares for cash no later than immediately prior to the vote on the acquisition proposal at the special meeting (or any adjournment or postponement thereof). If you validly exercise your redemption rights and the acquisition is completed then (1) you will be entitled to receive a pro rata portion of the trust account in which a substantial portion of the net proceeds of Freedom’s initial public offering are held, including any interest earned thereon through the date of the special meeting and (2) you will be exchanging your redemption election shares for cash and will no longer own these shares. However, if you elect to have Freedom redeem your redemption election shares, you will still have the right to exercise any warrants received as part of the units you hold in accordance with the terms thereof.

 

Based on the amount of cash held in the trust account as of June 30, 2007, without taking into account any interest accrued after such date, you will be entitled to elect to have Freedom redeem each redemption election share that you hold for approximately $9.88 per share. You will only be entitled to receive cash for these shares if you continue to hold these shares through the closing date of the acquisition and then tender your stock certificate to Freedom. If the acquisition is not completed, then these shares will not be redeemed for cash. Freedom will have sufficient funds in the trust account (after giving effect to the co-investment and the payment of the cash purchase price of the acquisition) to pay the redemption price for the redemption election shares, even if it must redeem 19.99% of the shares of common stock issued in Freedom’s initial public offering.

 

The acquisition will not be completed if the holders of 10,560,000 or more shares of common stock issued in Freedom’s initial public offering, an amount equal to 20% or more of such shares, vote against the acquisition proposal and exercise their redemption rights, regardless of whether a majority of the outstanding shares of Freedom common stock vote in favor of the acquisition proposal. If the acquisition is not completed, then your redemption election shares will not be redeemed for cash at this time, even if you elected redemption.

 

You will be required, whether you are a record holder or hold your shares in “street name”, either to tender your certificates to our transfer agent at any time through the vote on the acquisition or to deliver your shares to Freedom’s transfer agent electronically using the Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at your option. There is a nominal cost associated with this tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $35, and the broker may or may not pass this cost on to you.

 

You will have sufficient time from the time we send out this proxy statement through the time of the vote on the acquisition proposal to deliver your shares if you wish to exercise your redemption rights. This time period will vary depending on the specific facts of each transaction. However, as the delivery process can be accomplished by you, whether or not you are a record holder or your shares are held in “street name”, within a day, by simply contacting the transfer agent or your broker and requesting delivery of your shares through the DWAC System, we believe this time period is sufficient for an average investor.

 

Any request for redemption, once made, may be withdrawn at any time up to immediately prior to the vote on the acquisition proposal at the special meeting (or any adjournment or postponement thereof). Furthermore, if you delivered a certificate for redemption and subsequently decided prior to the meeting not to elect redemption, you may simply request that the transfer agent return the certificate (physically or electronically) to you.

 

What happens to the Freedom warrants I hold if I vote against adoption of the acquisition proposal and exercise my redemption rights?

 

Properly exercising your redemption rights does not result in either the redemption or loss of your warrants. Your warrants will continue to be outstanding following the acquisition and the redemption of your Freedom common stock.

 

What if I object to the proposed acquisition? Do I have appraisal or dissenters’ rights?

 

No appraisal or dissenters’ rights are available under the Delaware General Corporation Law, which we refer to as the DGCL, for the stockholders of Freedom in connection with the proposals described in this proxy statement.

 

What happens to the funds deposited in the trust account after consummation of the acquisition?

 

Upon consummation of the acquisition, any funds remaining in the trust account after payment of amounts, if any, to stockholders requesting and exercising their redemption rights, will be used for working capital purposes.

 

What happens if the acquisition proposal, the pre-closing certificate amendment proposals, the post-closing certificate amendment proposal and the incentive plan proposal do not receive the necessary votes for approval?

 

If the acquisition proposal, pre-closing certificate amendments proposals, the post-closing certificate amendment proposal and the incentive plan proposal do not receive the necessary votes for approval, then only the adjournment proposal will be presented at the special meeting for adoption, and if such proposal is approved the special meeting will be adjourned to a later date or dates to permit further solicitation and vote of proxies.

 

What happens if, even after adjournment, the acquisition is not consummated?

 

If the acquisition is not consummated even after adjournment, Freedom’s certificate of incorporation will not be amended, the LTIP will not be adopted and Freedom will continue to search for a business to acquire. However, Freedom will be liquidated if (1) it does not consummate a business combination by June 28, 2008 or (2) a letter of intent, agreement in principle or definitive agreement is executed by June 28, 2008, but a business combination is not consummated by December 28, 2008. If Freedom is unable to conclude an initial business combination and is liquidated and it expends all of the net proceeds of its initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, net of income taxes payable on such interest and net of up to $3.9 million in interest income on the trust account balance previously released to it to fund working capital requirements, the initial per-share liquidation price would be $9.88, or $0.12 less than the per-unit offering price of $10.00. We cannot assure you that the actual per share liquidation price will not be less than $9.88. Furthermore, the outstanding warrants are not entitled to participate in a liquidating distribution and the warrants will therefore expire and become worthless if Freedom dissolves and liquidates before completing a business combination.

 

If the acquisition is completed, what will happen to the Freedom common stock, units and warrants?

 

The acquisition will have no effect on the Freedom common stock, units and warrants currently outstanding, except that Freedom expects that they will trade on the New York Stock Exchange instead of the American Stock Exchange, upon consummation of the acquisition. Freedom may in the future consider the listing of its common stock, warrants and units on a trading market in London, Europe or elsewhere.

 

When do you expect the proposals to be completed?

 

Freedom expects that the transactions and actions contemplated in the proposals (other than the post-closing certificate amendment) will be completed as promptly as practicable following the Freedom special meeting of stockholders to be held on             , 2007. However, Freedom may terminate the purchase agreement in certain circumstances even if stockholders approve the acquisition proposal. The post-closing certificate amendment proposal will be completed as soon as practicable after consummation of the acquisition.

 

Who can help answer my questions?

 

If you have questions about any of the proposals, you may write or call          .

 

SUMMARY

	•	Each of GLG’s principals, Noam Gottesman, Emmanuel Roman and Pierre Lagrange, whom we refer to collectively as the Principals;
	•	Leslie J. Schreyer, in his capacity as trustee of the Gottesman GLG Trust, a trust established by Mr. Gottesman for the benefit of himself and his family, which we refer to as the Gottesman GLG Trust;

	•	G&S Trustees Limited*, in its capacity as trustee of the Lagrange GLG Trust, a trust established by Mr. Lagrange for the benefit of himself and his family, which we refer to as the Lagrange GLG Trust;

	•	Jeffrey A. Robins, in his capacity as trustee of the Roman GLG Trust, a trust established by Mr. Roman for the benefit of himself and his family, which we refer to as the Roman GLG Trust;

	•	Abacus (C.I.) Limited*, in its capacity as trustee of the Green GLG Trust;

	•	Lehman (Cayman Islands) Ltd;

	•	Istithmar, a wholly owned subsidiary of Dubai World, the Government of Dubai’s investment company;

	•	Sal. Oppenheim jr. & Cie.;

	•	Lavender Heights Capital LP, an entity through which certain of GLG’s key personnel participate in the equity participation plan described below under “— Acquisition — Related Transactions and Agreements” and the general partner of which is Mount Garnet Limited, the directors of which are the Trustees;

	•	Ogier Fiduciary Services (Cayman) Limited*, in its capacity as trustee of the Green Hill Trust, a trust established for the benefit of certain past, current or future GLG employees and key personnel who participate or may in the future participate in any remainder interests in the equity participation plan;

	•	Sage Summit LP, an entity through which certain of GLG’s key personnel participate in the equity participation plan and the general partner of which is Sage Summit Ltd., the directors of which are the Trustees; and

	•	Ogier Fiduciary Services (Cayman) Limited*, in its capacity as trustee of the Blue Hill Trust, a trust established for the benefit of certain past, current or future GLG employees and key personnel who participate or may in the future participate in any remainder interests in the equity participation plan.

	•	Limited partner profit shares:  Certain profit share interests of GLG’s key personnel (other than the Principals) who participate in GLG’s limited partner profit share arrangement described under “Organizational Structure”; and

	•	Exchangeable Shares:  Exchangeable Shares of FA Sub 2 Limited representing approximately 20% of the equity of FA Sub 2 Limited described below under “— Acquisition Consideration” will be held by the Trustee of the Gottesman GLG Trust.

	•	$1.0 billion in cash, reduced by the amount of any promissory notes issued to Sage Summit LP and Lavender Heights Capital LP at their election (“Notes”);

	•	Notes, if Sage Summit LP and Lavender Heights Capital LP elect to receive Notes in lieu of all or a portion of the cash consideration payable to the electing GLG Shareowner(s);

	•	230,000,000 shares of Freedom common stock, which consists of:

	•	138,095,007 shares of Freedom common stock issuable by Freedom upon the consummation of the acquisition, including 10,000,000 shares of common stock to be issued for the benefit of GLG’s employees, key personnel and certain other individuals;

	•	33,000,000 shares of common stock payable by Freedom upon exercise of certain put or call rights with respect to 33,000,000 ordinary shares to be issued by FA Sub 1 Limited to Sage Summit LP and Lavender Heights Capital LP upon the consummation of the acquisition; and

	•	58,904,993 shares of common stock to be issued upon the exchange of 58,904,993 Exchangeable Shares to be issued by FA Sub 2 Limited to the Trustee of the Gottesman GLG Trust upon the consummation of the acquisition; and

	•	58,904,993 shares of Series A preferred stock to be issued to the Trustee of the Gottesman GLG Trust upon the consummation of the acquisition.

	•	Freedom’s stockholders have approved the acquisition, the pre-closing and post-closing amendments to Freedom’s certificate of incorporation and the LTIP;
	•	holders of less than 20% of the shares of Freedom common stock issued in its initial public offering vote against the acquisition proposal and elect to have Freedom redeem their shares for cash; and
	•	the other conditions specified in the purchase agreement described below under “— Conditions to the Completion of the Acquisition” have been satisfied or waived.

	•	the Applicable Margin (as described below) plus the highest of:

	•	Citibank, N.A.’s base rate;

	•	the three-month certificate of deposit rate plus 0.5%; and

	•	the federal funds effective rate plus 0.5%; or

	•	the Applicable Margin plus the current LIBOR.

	•	GLG Partners, Inc. will hold 100% of the ordinary shares of FA Sub 1 Limited, assuming that all of the FA Sub 1 Limited ordinary shares issued at the closing to Sage Summit LP and Lavender Heights Capital LP subject to the put/call arrangement are exchanged following the closing of the acquisition for Freedom common stock. The purpose of FA Sub 1 Limited is to be the holding company for all the non-U.S. entities that conduct GLG’s business.

	•	FA Sub 1 Limited will hold 100% of the Class A ordinary shares of FA Sub 2 Limited, and the Trustee for the Gottesman GLG Trust will own 100% of the Exchangeable Shares of FA Sub 2 Limited, the company through which the Trustee of the Gottesman GLG Trust will hold its continuing interest in the Acquired Companies. The purpose of FA Sub 2 Limited is to be the holding company for the GLG businesses that are subject to the regulatory authority of the Cayman Islands.

	•	FA Sub 2 Limited will hold 100% of the ordinary shares of FA Sub 3 Limited. The purpose of FA Sub 3 Limited is to be the holding company for the GLG businesses that are subject to the regulatory authority of the European Union, the United Kingdom, Ireland, Luxembourg and other European regulatory authorities.

Albacrest:		Albacrest Corporation
Betapoint:		Betapoint Corporation
GHL:		GLG Holdings Limited
GLGPL:		GLG Partners Limited
Gottesman Trust:		Gottesman GLG Trust
GPAM:		GLG Partners Asset Management Limited
GPCL:		GLG Partners (Cayman) Limited
GPICL:		GLG Partners International (Cayman) Limited
GPC:		GLG Partners Corporation
GPLP:		GLG Partners LP
GPS:		GLG Partners Services Limited
GPS LP:		GLG Partners Services LP
Knox Pines:		Knox Pines Ltd.
Laurel Heights:		Laurel Heights LLP
Lavender Heights:		Lavender Heights LLP
Liberty Peak:		Liberty Peak Ltd.
Mount Garnet:		Mount Garnet Limited
Mount Granite:		Mount Granite Limited
Saffron Woods:		Saffron Woods Corporation
Steven Roth:		a GLG key personnel

*		Represents profits interests of participants in GLG’s limited partner profit share arrangement that are not being acquired by Freedom in the acquisition.

†		These entities hold capital interests and discretionary profits interests in GPS LP.

‡		This entity holds capital interests and discretionary profits interests in GPLP.

		Number of				Percentage
Name of Shareholder		Shares(1)				Interest
Berggruen Holdings North America Ltd.			8,423,200				2.81	%
Marlin Equities			8,423,200				2.81	%
Noam Gottesman(2)			58,904,993				19.65	%
Emmanuel Roman(3)			18,699,995				6.24	%
Pierre Lagrange(4)			58,904,993				19.65	%
Jonathan Green(5)			3,630,304				1.21	%
Lehman (Cayman Islands) Ltd			33,659,998				11.23	%
Istithmar(6)			6,599,843				2.20	%
Sal. Oppenheim jr. & Cie.(7)			6,599,843				2.20	%
Lavender Heights Capital LP(8)			13,200,000				4.40	%
Sage Summit LP(8)			19,800,000				6.60	%
GLG Employees, Key Personnel and Service Providers(9)			10,000,000				3.34	%
Total			246,846,369				82.34	%

(1)		The trustee of the Gottesman GLG Trust will own all the Exchangeable Shares of FA Sub 2 Limited and the Freedom Series A preferred Stock, as described in the proxy statement. All the other shares will be Freedom common stock.

(2)		Includes 58,904,993 Exchangeable Shares and 58,904,993 associated shares of Freedom Series A preferred stock expected to be owned by the Gottesman GLG Trust, which will be exchangeable by the holder at any time and from time to time following the consummation of the acquisition into 58,904,993 shares of Freedom common stock. Each share of Series A preferred stock will be automatically redeemed upon the exchange of an Exchangeable Share.

(3)		Includes 18,699,995 shares of Freedom common stock expected to be owned by the Roman GLG Trust.

(4)		Includes 58,904,993 shares of Freedom common stock expected to be owned by the Lagrange GLG Trust.

(5)		Includes 3,630,019 shares of Freedom common stock expected to be owned by the Green GLG Trust.

(6)		Represents shares to be owned by IFS V Limited, a wholly owned subsidiary of Istithmar.

(7)		Represents shares to be owned by FARAMIR Beteiligungs und Verwaltungs GmbH, a wholly owned subsidiary of Sal. Oppenhem jr. & Cie.

(8)		Represents shares held on behalf of certain non-employee key personnel who participate in the equity participation plan through Lavender Heights Capital LP and Sage Summit LP, subject to certain vesting requirements. Until vesting, the Trustees, as the directors of the general partner of these limited partnerships will have shared voting power over the shares and will be attributed beneficial ownership of the shares. The Principals disclaim beneficial ownership over these shares.

(9)		Represents 10,000,000 shares to be allocated from the acquisition consideration and held for the benefit of GLG employees, key personnel and certain other individuals (other than the Principals), subject to certain vesting requirements. Until vesting, the Principals will have shared voting power over the shares and will be attributed beneficial ownership of the shares. The Principals disclaim beneficial ownership over these shares.

		Units(a)																Warrants(b)
		Beneficially				Amount								Unrealized				Beneficially				Amount								Unrealized
		Owned				Paid				Value				Profit				Owned				Paid				Value				Profit
Nicolas Berggruen			7,423,200			$	2,512,340			$				$					2,250,000			$	2,250,000			$				$
Martin E. Franklin			7,423,200				2,512,340												2,250,000				2,250,000
James N. Hauslein			51,201				106												—				—
William P. Lauder			51,201				106												—				—
Herbert A. Morey			51,201				106												—				—
Jared Bluestein			—				—				—				—				—				—				—				—
Total			15,000,003			$	5,024,998			$				$					4,500,000			$	4,500,000			$				$

(a)		The purchase price per unit for the founders’ units was $0.00208 per unit and for the co-investment units is $10.00 per unit. Each of these stockholders has agreed, subject to exceptions, not to transfer, assign or sell these shares until one year after we consummate a business combination.

(b)		Excludes warrants included in the units.

	•	the representations and warranties of the other group that are qualified by materiality must be true and correct in all respects and the representations and warranties of the other group that are not so qualified must be true in all material respects on the date of the purchase agreement and as of the closing date as if they were made on that date;
	•	the other group’s performance or compliance with its covenants and agreements contained in the purchase agreement or the transaction documents;
	•	no litigation or action being threatened in writing, instituted or pending which is reasonably likely to make illegal, delay, restrain, prohibit or otherwise adversely affect consummation of the acquisition or which would otherwise have a material adverse effect on GLG or the Freedom Group as applicable;
	•	the absence of any law or action by any court or other government entity which may inhibit or have a material adverse effect on the acquisition;
	•	the receipt of all required approvals and consents and their submission to the other group;
	•	the termination or expiration of all antitrust-related waiting periods, the receipt of all antitrust approvals and consents and the filing of all antitrust notices or filings required to have been made;
	•	the approval by Freedom’s stockholders of the acquisition proposal and the other proposals contained in this proxy statement;
	•	the execution and delivery by each of the other parties of each of the transaction documents; and
	•	the availability for funding on the closing date of the entire amount that may be borrowed under the credit agreement by FA Sub 3 Limited and the satisfaction of all conditions precedent to the borrowing of $550.0 million.

	•	by mutual written agreement of Freedom and the GLG Shareowners’ representative;
	•	by either group, if the closing has not occurred before the termination date of December 31, 2007;
	•	by either group, if there is any law or court or governmental order, which is not subject to appeal or has become final, that makes consummation of the acquisition illegal or otherwise prohibited;
	•	by either group, if there has been a breach of any representation, warranty, covenant or agreement by the other group such that the conditions set forth above with respect to representations, warranties, covenants and agreements under “— Conditions to the Completion of the Acquisition” would not be satisfied as of such time, unless such breach is curable and the breaching party continues to exercises reasonable best efforts to cure it; or
	•	by either group, if the required approvals of Freedom’s stockholders related to the acquisition are not obtained.

																						Six Months
		Years Ended December 31,																				Ended June 30,
		2002				2003				2004				2005				2006				2006				2007
		(unaudited)								(US dollars in thousands)												(unaudited)
Combined Statement of Operations Data:
Net revenues and other income:
Management fees, net		$	30,108			$	65,259			$	138,988			$	137,958			$	186,273			$	82,971			$	120,334
Performance fees, net			31,288				206,685				178,024				279,405				394,740				175,946				343,032
Administration fees, net			—				—				—				311				34,814				15,921				26,680
Transaction charges			80,613				115,945				191,585				184,252				—				—				—
Other			626				6,497				6,110				1,476				5,039				2,023				970
Total net revenues and other income			142,635				394,386				514,707				603,402				620,866				276,861				491,016
Expenses:
Employee compensation and benefits			(88,994	)			(158,789	)			(196,784	)			(345,918	)			(168,386	)			(114,459	)			(81,566	)
General, administrative and other			(22,052	)			(23,005	)			(42,002	)			(64,032	)			(68,404	)			(27,285	)			(53,743	)
Total expenses			(111,046	)			(181,794	)			(238,786	)			(409,950	)			(236,790	)			(141,744	)			(135,309	)
Income from operations			31,589				212,592				275,921				193,452				384,076				135,117				355,707
Interest income, net			882				709				519				2,795				4,657				2,574				1,647
Income before income taxes			32,471				213,301				276,440				196,247				388,733				137,691				357,354
Income taxes			(8,456	)			(49,966	)			(48,372	)			(25,345	)			(29,225	)			(13,000	)			(28,286	)
Net income		$	24,015			$	163,335			$	228,068			$	170,902			$	359,508			$	124,691			$	329,068
Distributions to Principals and Trustees		$	(33,895	)		$	(70,825	)		$	(222,074	)		$	(106,531	)		$	(165,705	)		$	(148,533	)		$	(145,069	)
Distributions to non-controlling interest holders			—				—				—				—				(14,656	)			—				(208,043	)

		As of December 31,																				As of June 30,
		2002				2003				2004				2005				2006				2006				2007
		(unaudited)								(US dollars in thousands)												(unaudited)
Combined Balance Sheet Data:
Cash and cash equivalents		$	28,450			$	65,655			$	136,378			$	236,261			$	273,148			$	97,672			$	130,268
Fees receivable			34,826				139,103				163,235				246,179				251,963				198,211				380,157
Working capital			15,579				25,940				20,395				42,387				370,094				169,251				344,129
Property and equipment, net			4,102				3,801				4,342				3,290				6,121				3,253				8,980
Total assets			75,359				220,829				310,592				495,340				557,377				311,661				546,977
Accrued compensation and benefits			21,654				25,038				125,850				247,745				102,507				81,954				47,702
Other liabilities			—				—				—				—				5,100				5,000				3,653
Loans payable			13,000				13,000				13,000				13,000				13,000				13,000				13,000
Total members’ equity			19,400				112,722				117,980				180,229				361,952				158,123				338,305

		As of				As of
Balance Sheet Data:		December 31, 2006				June 30, 2007
Working capital (deficiency)		$	(122,294	)		$	(3,436,415	)
Total assets			467,306,751				526,075,556
Total liabilities			110,289,016				128,681,005
Common stock, subject to possible redemption for cash			93,247,353				102,572,088
Stockholders’ equity			357,017,735				397,394,551

		Year Ended								Six Months Ended
		December 31, 2006								June 30, 2007
		Maximum				Minimum				Maximum				Minimum
		Approval				Approval				Approval				Approval
		(US dollars in thousands, except per share amounts)
Pro Forma Statement of Operations Data:
Net revenues and other income		$	620,866			$	620,866			$	491,016			$	491,016
Income (loss) from operations			(421,250	)			(421,250	)			(46,907	)			(46,907	)
Income (loss) before income taxes			(448,304	)			(455,431	)			(60,512	)			(63,948	)
Income taxes			(22,491	)			(20,353	)			(25,176	)			(24,146	)
Net loss			(470,795	)			(475,784	)			(85,688	)			(88,094	)
Net loss applicable to equity interest holders			(500,557	)			(505,121	)			(113,624	)			(115,823	)
Basic and diluted net loss per common share		$	(1.67	)		$	(1.75	)		$	(0.38	)		$	(0.40	)
Shares used in computing basic and diluted net loss per common share			299,800				289,245				299,800				289,245
Pro Forma Balance Sheet Data (at period end):
Cash and cash equivalents										$	106,147			$	106,147
Working capital											346,427				346,427
Total assets											651,029				651,029
Loans payable											467,428				570,000
Stockholders’/Members’ equity											(70,229	)			(172,801	)

		As of and for the				As of and for the
		Year Ended				Six Months Ended
		December 31, 2006				June 30, 2007
Freedom — Historical:
Net income per common share — Basic		$	0.01			$	0.11
Net income per common share — Diluted		$	0.01			$	0.08
Cash dividends declared per common share		$	—			$	—
Book value per common share		$	6.87			$

		As of and for the								As of and for the
		Year Ended								Six Months Ended
		December 31, 2006								June 30, 2007
		Maximum				Minimum				Maximum				Minimum
		Approval				Approval				Approval				Approval
Pro Forma Combined:
Net loss per common share — Basic		$	(1.67	)		$	(1.75	)		$	(0.38	)		$	(0.40	)
Net loss per common share — Diluted		$	(1.67	)		$	(1.75	)		$	(0.38	)		$	(0.40	)
Cash dividends declared per common share		$	—			$	—			$	—			$	—
Book value per common share		$				$				$				$

 

You should carefully consider the following risk factors, together with all of the other information included in this proxy statement, before you decide whether to vote or instruct your vote to be cast to adopt the acquisition proposal. As GLG’s operations will be those of Freedom upon consummation of the acquisition, a number of the following risk factors relate to the business and operations of GLG, as our successor. Unless the context indicates otherwise, in this section prior to the acquisition, the terms “we”, “us” and “our” refer to Freedom and, following the consummation of the acquisition, such terms refer to the combined company, which will be renamed GLG Partners, Inc.

 

Risks Related to Our Business Following the Acquisition

 

Difficult market conditions may adversely affect our business in many ways, each of which could materially reduce our revenue and cash flow and adversely affect our business, results of operations or financial condition.

 

GLG’s business is materially affected by conditions in the global financial markets and economic conditions throughout the world that are outside its control, such as interest rates, availability of credit, inflation rates, economic uncertainty, changes in laws (including laws relating to taxation), trade barriers, commodity prices, currency exchange rates and controls and national and international political circumstances (including wars, terrorist acts or security operations). These factors may affect the level and volatility of securities prices and the liquidity and the value of investments, and we may not be able to or may choose not to manage its exposure to these market conditions. Our profitability may also be adversely affected by fixed costs and the possibility that it would be unable to scale back other costs within a time frame sufficient to match any decreases in revenue relating to changes in market and economic conditions.

 

A general market downturn, or a specific market dislocation, may result in lower net inflows and lower returns for the GLG Funds, which would adversely affect our revenues. Furthermore, such conditions would also increase the risk of default with respect to investments held by the GLG Funds that have significant debt investments.

 

GLG’s revenue, net income and cash flow are dependent upon performance fees, which may make it difficult for us to achieve steady earnings growth on a semi-annual basis.

 

GLG’s revenue, net income and cash flow are all highly variable, primarily due to the fact that performance fees can vary significantly from period to period, in part, because performance fees are recognized as revenue only when contractually payable, or “crystallized”, from the GLG Funds and managed accounts to which they relate, generally on June 30 and December 31 of each year for the majority of the GLG Funds. Although GLG has historically had low inter-group correlations across asset classes, it may also experience fluctuations in our results from period to period due to a number of other factors, including changes in the values of the GLG Funds’ investments, changes in the amount of distributions, dividends or interest paid in respect of investments, changes in our operating expenses, the degree to which we encounter competition and general economic and market conditions. Such variability may lead to volatility in the trading price of our common stock and cause our results for a particular period not to be indicative of our performance in a future period. It may be difficult for us to achieve steady growth in net income and cash flow on a semi-annual basis, which could in turn lead to large adverse movements in the price of our common stock or increased volatility in our stock price generally.

 

The GLG Funds have “high water marks”, whereby performance fees are earned by GLG only to the extent that the net asset value of a GLG Fund at the end of a semi-annual period exceeds the highest net asset value on the last date on which a performance fee was earned. Certain of the GLG Funds also have LIBOR hurdles whereby performance fees are not earned during a particular period until the returns of such funds surpass the LIBOR rate. The performance fees we earn are therefore dependent on the net asset value of the GLG Funds, which could lead to significant volatility in our semi-annual results. Because our revenue, net income and cash flow can be highly variable from period to period, we plan not to provide any guidance

regarding our expected semi-annual and annual operating results. The lack of guidance may affect the expectations of public market analysts and could cause increased volatility in our stock price.

 

Periods of underperformance could lead to disproportionate redemptions in the GLG Funds or a decline in the rate at which we acquire additional AUM.

 

If the GLG Funds underperform, existing clients may decide to reduce or redeem or sell their investments or transfer asset management responsibility to other asset managers and we may be unable to obtain new asset management business. Poor performance relative to other asset management firms may result in reduced purchases of fund shares or units and increased sales or redemptions of fund shares or units. As a result, investment underperformance could have a material adverse effect on our business, results of operations or financial condition. Such underperformance would also likely lead to a decrease in our revenue and operating income.

 

In order to retain our investment professionals during periods of poor performance, we may have to pay our investment professionals a significant amount, even if we earn low or no performance fees, which could have an adverse impact on our business, results of operations or financial condition.

 

Competition for investment professionals in the alternative asset management industry is intense. Historically, the compensation and limited partner profit share paid to GLG’s investment personnel and senior management (other than the Principals) have been determined by the Principals or by the Trustees in consultation with the Principals. GLG has set compensation at levels that it believes are competitive against compensation offered by other alternative asset managers and leading investment banks against whom it competes for senior management and other key personnel, principally those located in London, while taking into account the performance of the GLG Funds and the GLG managed accounts. GLG believes these forms of remuneration are important to align the interests of its senior management and key personnel with those of investors in the GLG Funds. However, even if we earn low or no performance fees, we may be required to pay significant compensation and limited partner profit share to retain our key personnel. In these circumstances, these amounts may represent a greater percentage of our revenues than they have historically.

 

Investors in the GLG Funds can generally redeem investments with only short periods of notice.

 

Investors in the GLG Funds may generally redeem their investments in those funds with only short periods of notice. Investors may reduce the aggregate amount of their investment in such funds, or transfer their investment to other funds with different fee rate arrangements, for any number of reasons, including investment performance, changes in prevailing interest rates and financial market performance, or for no reason. If interest rates are rising and/or stock markets are declining, the pace of fund redemptions could accelerate. Redemptions of investments in the GLG Funds could also take place more quickly than assets may be sold on account of those funds to meet the price of such redemptions, which could result in relevant funds and/or our being in breach of applicable legal, regulatory and contractual requirements in relation to such redemptions resulting in possible regulatory and stockholder actions against us and/or the GLG Funds. Any such action could potentially cause further redemptions and/or make it more difficult to attract new investors. The redemption of investments in the GLG Funds could adversely affect our revenues, which are substantially dependent upon the AUM in the GLG Funds. If redemptions of investments in funds cause our revenues to decline, they could have a material adverse effect on our business, results of operations or financial condition.

 

We will be dependent on the continued services of GLG’s Principals and other key personnel. The loss of key personnel could have a material adverse effect on us.

 

GLG’s Principals and other key personnel have contributed to the growth and success of its business. We will be dependent on the continued services of Messrs. Gottesman, Roman and Lagrange and other key personnel for our future success. The loss of any Principal or other key personnel may have a significant effect on our business, results of operations or financial condition.

The market for experienced asset management professionals is extremely competitive and is increasingly characterized by frequent movement of employees among firms. Due to the competitive market for asset management professionals and the success achieved by some of GLG’s key personnel, the costs to attract and retain key personnel are significant and will likely increase over time. In particular, if we lose any of our Principals or other key personnel, there is a risk that we may also experience outflows from AUM or fail to obtain new business. As a result, the inability to attract or retain the necessary highly skilled key personnel could have a material adverse effect on our business, results of operations or financial condition.

 

The cost of compliance with international employment, labor, benefits and tax regulations may adversely increase our costs, affect our revenue and impede our ability to expand internationally.

 

Since GLG operates its business internationally, it is subject to many different employment, labor, benefit and tax laws in each country in which GLG operates, including laws and regulations affecting employment practices, GLG’s relations with the Principals and its relations with some of its key personnel who participate in the limited partner profit share arrangement described below. If we are required to comply with new regulations or new or different interpretations of existing regulations, or if we are unable to comply with these regulations or interpretations, our business could be adversely affected, or the cost of compliance may make it difficult to expand into new international markets, or we may be liable for additional costs, such as social security or social insurance, which may be substantial. Additionally, our competitiveness in international markets may be adversely affected by regulations requiring, among other things, the awarding of contracts to local contractors, the employment of local citizens and/or the purchase of services from local businesses or that favor or require local ownership.

 

GLG has experienced rapid growth, which may be difficult to sustain and which may place significant demands on our administrative, operational and financial resources.

 

As of June 30, 2007, GLG’s gross AUM (including assets invested from other GLG Funds) were approximately $21.5 billion, up from approximately $3.9 billion as of December 31, 2001. As of June 30, 2007, GLG’s net AUM (net of assets invested from other GLG Funds) were approximately $18.6 billion, up from approximately $3.9 billion as of December 31, 2001. This rapid growth has caused, and if it continues will continue to cause, significant demands on GLG’s legal, accounting, technology and operational infrastructure, and increased expenses. The complexity of these demands, and the expense required to address them, is a function not simply of the amount by which GLG’s AUM have grown, but of significant differences in the investing strategies of its different funds. In addition, we will be required to continuously develop our systems and infrastructure in response to the increasing sophistication of the investment management market and legal, accounting and regulatory developments. Our future growth will depend, among other things, on our ability to maintain an operating platform and management system sufficient to address our growth and will require us to incur significant additional expenses and to commit additional senior management and operational resources. As a result, we face significant challenges:

 

 

There can be no assurance that we will be able to manage our expanding operations effectively or that we will be able to continue to grow, and any failure to do so could adversely affect our ability to generate revenue and control our expenses.

 

There can be no assurance that our expansion into the United States or other markets will be successful.

 

While GLG is currently in the process of developing distribution capability in the United States, the Middle East and Asia, expanding our operations into the United States or other markets will be difficult due to a number of factors, including the fact that several of them are well-developed markets with established competitors and different regulatory regimes. Our failure to continue to grow our revenues (whether or not as

a result of a failure to increase AUM), expand our business or control our cost base could have a material adverse effect on our business, results of operations or financial condition.

 

Damage to our reputation, including as a result of personnel misconduct, failure to manage inside information, or fraud, could have a material adverse effect on our business.

 

GLG’s reputation is one of its most important assets. Its relationships with individual and institutional investors and other significant market participants are very important to its business. Any deterioration in our reputation held by one or more of these market participants could lead to a loss of business or a failure to win new fund mandates. For example, we will be exposed to the risk that litigation, regulatory action, misconduct, operational failures, negative publicity or press speculation, whether or not valid, could harm our reputation. Factors which could adversely affect our reputation include but are not limited to:

 

 

Damage to our reputation as a result of these or other factors could have a material adverse effect on our business, results of operations or financial condition.

 

Operational risks may disrupt our business, result in losses or limit our growth.

 

GLG relies heavily on its financial, accounting and other data processing systems. If any of these systems do not operate properly or are disabled, we could suffer financial loss, a disruption of our business, liability to the GLG Funds, regulatory intervention or reputational damage.

 

In addition, GLG operates in a business that is highly dependent on information systems and technology. Our information systems and technology may not continue to be able to accommodate our growth, and the cost of maintaining such systems may increase from its current level. Such a failure to accommodate growth, or an increase in costs related to such information systems, could have a material adverse effect on us.

 

Furthermore, GLG depends on its headquarters in London, where most of its personnel are located, for the continued operation of its business. A disaster or a disruption in the infrastructure that supports our business, including a disruption involving electronic communications or other services used by us or third parties with whom we will conduct business, or directly affecting our headquarters, could have a material adverse impact on our ability to continue to operate our business without interruption. Our disaster recovery programs may not be sufficient to mitigate the harm that may result from such a disaster or disruption. In addition, insurance and other safeguards might only partially reimburse us for our losses, if at all.

 

Through outsourcing arrangements, GLG and the GLG Funds rely on third-party administrators and other providers of middle- and back-office support and development functions, such as prime brokers, custodians,

market data providers and certain risk system, portfolio and management and telecommunications system providers. Any interruption in our ability to rely on the services of these third parties or deterioration in their performance could impair the quality (including the timing) of our services. Furthermore, if the contracts with any of these third-party providers are terminated, we may not find alternative outsource service providers on a timely basis or on equivalent terms. The occurrence of any of these events could have a material adverse effect on our business, results of operations or financial condition.

 

Our business may suffer as a result of loss of business from key private and institutional investors.

 

GLG generates a significant proportion of its revenue from a small number of its top clients. As of July 31, 2007, the assets of GLG’s top individual client accounted for approximately 5.3% of its net AUM. As of July 31, 2007, GLG’s largest institutional investor account represented 4.4% of its net AUM, with the top five accounts collectively contributing 18.9% of its net AUM. The loss of all or a substantial portion of the business provided by one or more of these clients would have a material impact on the income we derive from management and performance fees and consequently have a material adverse effect on our business, results of operations or financial condition.

 

We may be subject to regulatory investigation or enforcement action or a change in regulation in the jurisdictions in which we operate.

 

Our business is subject to regulation by various regulatory authorities that are charged with protecting the interests of our customers. The activities of GLG Partners LP are regulated primarily by the FSA in the United Kingdom and are also subject to regulation in the various other jurisdictions in which it operates, including the IFSRA, CIMA and the Commission de Surveillance du Secteur Financier in Luxembourg. In addition, the GLG Funds are subject to regulation in the jurisdictions in which they are organized. These and other regulators in these jurisdictions have broad regulatory powers dealing with all aspects of financial services including, among other things, the authority to make inquiries of companies regarding compliance with applicable regulations, to grant — and in specific circumstances to vary or cancel — permits and to regulate marketing and sales practices, advertising and the maintenance of adequate financial resources. We will also be subject to applicable anti-money laundering regulations and net capital requirements in the jurisdictions in which we operate.

 

For example, on February 28, 2006, the FSA found that GLG had committed market abuse and failed to observe proper standards of market conduct in relation to a convertible bond issued by Sumitomo Mitsui Financial Group in 2003. This finding was based solely on the conduct of Philippe Jabre, a former Managing Director who resigned from GLG in early 2006. The FSA imposed £750,000 fines on both GLG and Mr. Jabre.

 

On November 23, 2006, the Autorité des Marchés Financiers (“AMF”), the French securities regulator, imposed a fine of €1.2 million ($1.6 million) against GLG in connection with GLG’s trading in the shares of Alcatel S.A. (“Alcatel”) based on confidential information prior to a December 12, 2002 issuance of Alcatel convertible securities. GLG has appealed this decision.

 

On May 29, 2007, GLG agreed to pay a civil penalty of $500,000 and disgorgement and interest of approximately $2.7 million to settle enforcement and civil actions brought by the SEC for illegal short selling. GLG did not admit or deny the findings, but consented to the SEC order finding that GLG violated Rule 105 of Regulation M under the Exchange Act in connection with 14 public offerings and a final judgment in the civil action in the United States District Court for the District of Columbia.

 

On June 21, 2007, the AMF, imposed a fine of €1.5 million ($2.0 million) against GLG in connection with GLG’s trading in the shares of Vivendi Universal S.A. (“Vivendi”) based on confidential information prior to a November 14, 2002 issuance of Vivendi notes which are mandatorily redeemable for Vivendi convertible securities. GLG has appealed this decision.

In addition, the regulatory environment in which we will operate frequently changes and has seen significant increased regulation in recent years. We may be materially adversely affected as a result of new or revised legislation or regulations or by changes in the interpretation or enforcement of existing laws and regulations.

 

As a result of regulatory actions, increased litigation in the financial services industry or other reasons, we could be subject to civil liability, criminal liability or sanctions (including revocation of the licenses of our employees or limited partners), censures, fines, or temporary suspension or permanent bar from conducting business. Regulatory proceedings could also result in adverse publicity or negative perceptions regarding our business and divert management’s attention from the day-to-day management of the business. Any regulatory investigations, proceedings, consequent liability or sanction could have a material adverse effect on our business, results of operations or financial condition.

 

We will be subject to substantial litigation and regulatory enforcement risks, and we may face significant liabilities and damage to our professional reputation as a result of litigation allegations or regulatory investigations and the attendant negative publicity.

 

The investment decisions GLG makes in its asset management business subject it to the risk of regulatory investigations and enforcement actions in connection with its investment activities, as well as third-party litigation arising from investor dissatisfaction with the performance of those investment funds and a variety of other litigation claims. In general, we will be exposed to risk of litigation by GLG Fund investors if a GLG Fund suffers losses resulting from the negligence, willful default, bad faith or fraud of the manager or the service providers to whom the manager has delegated responsibility for the performance of its duties. GLG has in the past been, and we may in the future be, the subject of investigations and enforcement actions by regulatory authorities resulting in fines and other penalties, which may be harmful to our reputation, as well as our business, results of operations or financial condition.

 

In addition, we will be exposed to risks of litigation or investigation relating to transactions which present conflicts of interest that are not properly addressed. In such actions, we would be obligated to bear legal, settlement and other costs (which may be in excess of available insurance coverage). Although we will be indemnified by the GLG Funds, our rights to indemnification may be challenged. If we are required to incur all or a portion of the costs arising out of litigation or investigations as a result of inadequate insurance proceeds or failure to obtain indemnification from the GLG Funds, our results of operations, financial condition and liquidity would be materially adversely affected.

 

Each of the GLG Funds is structured as a limited liability company, incorporated in the Cayman Islands, Ireland or Luxembourg. The laws of these jurisdictions, particularly with respect to shareholders rights, partner rights and bankruptcy, differ from the laws of the United States and could change, possibly to the detriment of the GLG Funds and GLG itself.

 

We will be subject to intense competition and could lose business to our competitors.

 

The alternative investment management industry in which we will be engaged is extremely competitive. Competition includes numerous national, regional and local asset management firms and broker-dealers, commercial bank and thrift institutions, and other financial institutions. Many of these organizations offer products and services that are similar to, or compete with, those offered by GLG and have substantially more personnel and greater financial resources than we will. Our key areas for competition include historical investment performance, our ability to source investment opportunities, our ability to attract and retain the best investment professionals, quality of service, the level of fees generated or earned by our managers and our investment managers’ stated investment strategy. We will also compete for investment assets with banks, insurance companies and investment companies. Our ability to compete may be adversely affected if we underperform in comparison to relevant benchmarks or peer groups.

 

The competitive market environment may result in increased pressure on revenue margins (e.g., by the provision of management fee rebates). Our profit margins and earnings will be dependent in part on our ability to maintain current fee levels for the products and services that we offer. Competition within the alternative

asset management industry could lead to pressure on us to reduce the fees that we charge our clients for products and services. A failure to compete effectively in this environment may result in the loss of existing clients and business, and of opportunities to capture new business, each of which could have a material adverse effect on our business, results of operations or financial condition.

 

Certain of our investment management and advisory agreements are subject to termination on short notice.

 

Institutional and individual clients, and firms and agencies with which we have strategic alliances, can terminate their relationships with us for various reasons, including unsatisfactory investment performance, interest rate changes and financial market performance. Termination of these relationships could have a material adverse effect on our business, results of operations and financial condition. Each of the GLG Funds has appointed either GLG Partners (Cayman) Limited (in the case of Cayman Islands funds and the Luxembourg fund) or GLG Partners Asset Management Limited (in the case of the Irish funds) as the manager under the terms of a management agreement, which is terminable on 30 days’ written notice by either party (i.e., the fund or the manager). The articles of association of each GLG Fund provide that the fund cannot terminate the management agreement unless holders of not less than 50% of the outstanding issued share capital have previously voted in favor of the termination at a general meeting of the fund. For each GLG Fund, the manager has appointed GLG Partners LP as investment manager under the terms of an investment management agreement, which is terminable on 30 days’ written notice by either party (i.e., the manager or the investment manager).

 

The historical returns attributable to the GLG Funds may not be indicative of our future results or of any returns expected on an investment in our common stock.

 

The historical and potential future returns of the GLG Funds are not directly linked to returns on its capital. Therefore, you should not conclude that continued positive performance of the GLG Funds will necessarily result in positive returns on an investment in our common stock. However, poor performance of the GLG Funds would cause a decline in our revenue from such funds, and would therefore have a negative effect on our performance and in all likelihood the returns on an investment in our common stock.

 

Our insurance arrangements may not be adequate to protect us.

 

GLG’s business entails the risk of liability related to litigation from clients or third-party vendors and actions taken by regulatory agencies. There can be no assurance that a claim or claims will be covered by insurance or, if covered, will not exceed the limits of available insurance coverage, or that any insurer will remain solvent and will meet its obligations to provide us with coverage or that insurance coverage will continue to be available with sufficient limits at a reasonable cost. Renewals of insurance policies may expose us to additional costs through higher premiums or the assumption of higher deductibles or co-insurance liability. The future costs of maintaining insurance or meeting liabilities not covered by insurance could have a material adverse effect on our business, results of operations or financial condition.

 

We may use substantial amounts of leverage to finance our business, which will expose us to substantial risks.

 

We may eventually use a significant amount of borrowings to finance our business operations as a public company, including for the provision of working capital, possible warrant and share repurchases, making minimum tax distributions and limited partner profit share distributions, acquisition financing and general business purposes. This will expose us to the typical risks associated with the use of substantial leverage, including those discussed below under “ — Risks Related to the GLG Funds — There are risks associated with the GLG Funds’ use of leverage.” These risks could result in an increase in our borrowing costs and could otherwise adversely affect our business in a material way. In addition, when our credit facility expires, we will need to negotiate a new credit facility with our existing lender, replace it by entering into credit facilities with new lenders or find other sources of liquidity, and there is no guarantee that we will be able to do so on

attractive terms or at all. See “GLG Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” for a further discussion of our liquidity.

 

An increase in our borrowing costs may adversely affect our earnings and liquidity.

 

Under our proposed new credit facility, we may borrow of up to $570.0 million. When this facility becomes due on August 1, 2008, we will have the option to convert the outstanding loan amounts into a term loan maturing three years from the closing of the acquisition. At maturity, we will be required to refinance the credit facility or loan, as applicable, by entering into new credit facilities or issuing debt securities, which could result in higher borrowing costs, or issuing equity, which would dilute existing stockholders. We could also repay the credit facility or loan, as applicable, by using cash on hand or cash from the sale of our assets. No assurance can be given that we will be able to enter into new credit facilities or issue debt or equity securities in the future on attractive terms, or at all, or that we will have sufficient cash on hand to repay the credit facility or loan, as applicable.

 

It is anticipated that loans under the credit facility will bear interest at a floating rate of (1) the base rate plus 0% per annum for loans based on the base rate or (2) LIBOR plus 1.25% for loans based on LIBOR for the first two fiscal quarters ending after the closing date of the acquisition, and thereafter at an interest rate based on certain financial ratios applicable to us and our consolidated subsidiaries. As such, the interest expense we incur will vary with changes in the applicable base or LIBOR reference rate. An increase in interest rates would adversely affect the market value of any fixed-rate debt investments and/or subject them to prepayment or extension risk, which may adversely affect our earnings and liquidity.

 

GLG is subject to currency-related risks that could adversely affect our business, results of operation or financial condition.

 

GLG earns a significant portion of its revenue and incurs a significant portion of its expenditure in currencies other than the U.S. dollar. Movements in currency exchange rates could have an adverse effect on both our revenues and expenses.

 

If we were deemed an “investment company” under the Investment Company Act of 1940 following the consummation of the acquisition, applicable restrictions could make it impractical for us to continue our business as contemplated and could have a material adverse effect on our business.

 

A person will generally be deemed to be an “investment company” for purposes of the Investment Company Act, if:

 

 

We believe that we will be engaged primarily in the business of providing asset management and financial advisory services and not in the business of investing, reinvesting or trading in securities. We also believe that the primary source of income from each of our businesses will be properly characterized as income earned in exchange for the provision of services. We will be an asset management and financial advisory firm and do not propose to engage primarily in the business of investing, reinvesting or trading in securities. Accordingly, we do not believe that, following the acquisition, we will be an “orthodox” investment company as defined in section 3(a)(1)(A) of the Investment Company Act and described in the first bullet point above. Further, following the acquisition, we will have no material assets other than our equity interests in our subsidiaries, which in turn will have no material assets, other than equity interests in the Acquired Companies and inter-company debt. (These subsidiaries will be vested with all management and control over the Acquired Companies.) We do not believe our equity interests in our subsidiaries or the equity interests of these subsidiaries in the Acquired Companies are investment securities. Moreover, because we believe that the

subscriber shares in certain GLG Funds are neither securities nor investment securities, we believe that less than 40% of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis following the acquisition will be comprised of assets that could be considered investment securities. Accordingly, we do not believe that, following the acquisition, we will be an inadvertent investment company by virtue of the 40% test in section 3(a)(1)(C) of the Investment Company Act as described in the second bullet point above.

 

The Investment Company Act and the rules thereunder contain detailed parameters for the organization and operation of investment companies. Among other things, the Investment Company Act and the rules thereunder limit or prohibit transactions with affiliates, impose limitations on the issuance of debt and equity securities, generally prohibit the issuance of options and impose certain governance requirements. We intend to conduct our operations so that we will not be deemed to be an investment company under the Investment Company Act. If anything were to happen which would cause us to be deemed to be an investment company under the Investment Company Act, requirements imposed by the Investment Company Act, including limitations on our capital structure, ability to transact business with affiliates (including the Acquired Companies) and ability to compensate key employees, could make it impractical for us to continue our business as currently conducted, impair the agreements and arrangements between and among us, the Acquired Companies, and our senior managing directors, or any combination thereof, and materially adversely affect our business, financial condition and results of operations. In addition, we may be required to limit the amount of investments that we make as a principal or otherwise conduct our business in a manner that does not subject us to the registration and other requirements of the Investment Company Act.

 

Risks Related to the GLG Funds

 

GLG currently derives its revenues from management fees and administration fees based on the value of the assets under management in the GLG Funds and the accounts managed by GLG, and performance fees based on the performance of the GLG Funds and the accounts managed by GLG. If the acquisition is consummated, Freedom’s stockholders will not become investors in the GLG Funds and the accounts managed by GLG, but rather will become stockholders of an alternative asset manager. GLG’s revenues could be adversely affected by many factors that could reduce assets under management or negatively impact the performance of the GLG Funds and accounts managed by GLG.

 

Valuation methodologies for certain assets in the GLG Funds can be subject to significant subjectivity.

 

In calculating the net asset values of the GLG Funds, administrators of the GLG Funds may rely on methodologies for calculating the value of assets in which the GLG Funds invest that GLG or other third parties supply. Such methodologies are advisory only but are not verified in advance by GLG or any third party, and the nature of some of the funds’ investments is such that the methodologies may be subject to significant subjectivity and little verification or other due diligence and may not comply with generally accepted accounting practices or other valuation principles. Any allegation or finding that such methodologies are or have become, in whole or in part, incorrect or misleading could have an adverse effect on the valuation of the relevant GLG Funds and, accordingly, on the management fees and any performance fees receivable by us in respect of such funds.

 

Some of the GLG Funds and managed accounts are subject to emerging markets risks.

 

Some of the GLG Funds and managed accounts invest in sovereign debt issues by emerging market countries as well as in debt and equity investments of companies and other entities in emerging markets. Many emerging markets are developing both economically and politically and may have relatively unstable governments and economies based on only a few commodities or industries. Many emerging market countries do not have firmly established product markets, and companies may lack depth of management or may be vulnerable to political or economic developments such as nationalization of key industries. Investments in companies and other entities in emerging markets and investments in emerging market sovereign debt may involve a high degree of risk and may be speculative. Risks include (1) greater risk of expropriation, confiscatory taxation, nationalization, social and political instability (including the risk of changes of

government following elections or otherwise) and economic instability; (2) the relatively small current size of some of the markets for securities and other investments in emerging markets issuers and the current relatively low volume of trading, resulting in lack of liquidity and in price volatility; (3) certain national policies which may restrict a GLG Fund’s or a managed account’s investment opportunities including restrictions on investing in issuers or industries deemed sensitive to relevant national interests; (4) the absence of developed legal structures governing private or foreign investment and private property; (5) the potential for higher rates of inflation or hyper-inflation; (6) currency risk and the imposition, extension or continuation of foreign exchange controls; (7) interest rate risk; (8) credit risk; (9) lower levels of democratic accountability; (10) differences in accounting standards and auditing practices which may result in unreliable financial information; and (11) different corporate governance frameworks. The emerging markets risks described above increase counterparty risks for GLG Funds and managed accounts investing in those markets. In addition, investor risk aversion to emerging markets can have a significant adverse affect on the value and/or liquidity of investments made in or exposed to such markets and can accentuate any downward movement in the actual or anticipated value of such investments which is caused by any of the factors described above.

 

Emerging markets are characterized by a number of market imperfections, analysis of which requires experience in the market and a range of complementary specialist skills. These inefficiencies include (1) the effect of politics on sovereign risk and asset price dynamics; and (2) institutional imperfections in emerging markets, such as deficiencies in formal bureaucracies, historical or cultural norms of behavior and access to information driving markets. While GLG seeks to take advantage of these market imperfections to achieve investment performance for the GLG Funds and managed accounts, we cannot guarantee that will be able do so in the future. A failure to do so could have a material adverse effect on our business, growth prospects, net inflows of AUM, revenues, results of operations and/or financial condition.

 

Many of the GLG Funds invest in foreign countries and securities of issuers located outside of the United States and the United Kingdom, which may involve foreign exchange, political, social and economic uncertainties and risks.

 

Many of the GLG Funds invest a portion of their assets in the equity, debt, loans or other securities of issuers located outside the United States and the United Kingdom. In addition to business uncertainties, such investments may be affected by changes in exchange values as well as political, social and economic uncertainty affecting a country or region. Many financial markets are not as developed or as efficient as those in the United States and the United Kingdom, and as a result, liquidity may be reduced and price volatility may be higher. The legal and regulatory environment may also be different, particularly with respect to bankruptcy and reorganization. Financial accounting standards and practices may differ, and there may be less publicly available information in respect of such companies.

 

Restrictions imposed or actions taken by foreign governments may adversely impact the value of our fund investments. Such restrictions or actions could include exchange controls, seizure or nationalization of foreign deposits and adoption of other governmental restrictions which adversely affect the prices of securities or the ability to repatriate profits on investments or the capital invested itself. Income received by the GLG Funds from sources in some countries may be reduced by withholding and other taxes. Any such taxes paid by a GLG Fund will reduce the net income or return from such investments. While the GLG Funds will take these factors into consideration in making investment decisions, including when hedging positions, no assurance can be given that the GLG Funds will be able to fully avoid these risks or generate sufficient risk-adjusted returns.

 

There are risks associated with the GLG Funds’ investments in high yield and distressed debt.

 

The GLG Funds may invest in obligors and issuers in weak financial condition, experiencing poor operating results, having substantial financial needs or negative net worth, facing special competitive problems, or in obligors and issuers that are involved in bankruptcy or reorganization proceedings. Among the problems involved in investments in troubled obligors and issuers is the fact that it may frequently be difficult to obtain full information as to the conditions of such obligors and issuers. The market prices of such investments are also subject to abrupt and erratic market movements and significant price volatility, and the spread between the bid and offer prices of such investments may be greater than normally expected. It may

take a number of years for the market price of such investments to reflect their intrinsic value. Some of the investments held by the GLG Funds may not be widely traded, and depending on the investment profile of a particular GLG Fund, that fund’s exposure to such investments may be substantial in relation to the market for those investments. In addition, there is no recognized market for some of the investments held in GLG Funds, with the result that such investments are likely to be illiquid. As a result of these factors, the investment objectives of the relevant funds may be more difficult to achieve.

 

Fluctuations in interest rates may significantly affect the returns derived from the GLG Funds’ investments.

 

Fluctuations in interest rates may significantly affect the return derived from investments within the GLG Funds, as well as the market values of, and the corresponding levels of gains or losses on, such investments. Such fluctuations could materially adversely affect investor sentiment towards fixed income and convertible debt instruments generally and the GLG Funds in particular and consequently could have a material adverse effect on our business, results of operations or financial condition.

 

The GLG Funds are subject to risks due to potential illiquidity of assets.

 

The GLG Funds may make investments or hold trading positions in markets that are volatile and which may become illiquid. Timely divestiture or sale of trading positions can be impaired by decreased trading volume, increased price volatility, concentrated trading positions, limitations on the ability to transfer positions in highly specialized or structured transactions to which it may be a party, and changes in industry and government regulations. It may be impossible or costly for the GLG Funds to liquidate positions rapidly in order to meet margin calls, withdrawal requests or otherwise, particularly if there are other market participants seeking to dispose of similar assets at the same time or the relevant market is otherwise moving against a position or in the event of trading halts or daily price movement limits on the market or otherwise. Moreover, these risks may be exacerbated for the GLG Funds that are funds of hedge funds. For example, if one of these funds of hedge funds were to invest a significant portion of its assets in two or more hedge funds that each had illiquid positions in the same issuer, the illiquidity risk for these funds of hedge funds would be compounded.

 

There are risks associated with the GLG Funds’ use of leverage.

 

The GLG Funds have, and may, in the future, use leverage by borrowing on the account of funds on a secured and/or unsecured basis and pursuant to repurchase arrangements and/or deferred purchase agreements. Leverage can also be employed in a variety of other ways including margining (that is, an amount of cash or securities an investor deposits with a broker when borrowing to buy investments) and the use of futures, warrants, options and other derivative products. Generally, leverage is used with the intention of increasing the overall level of investment in a fund. Higher investment levels may offer the potential for higher returns. This exposes investors to increased risk as leverage can increase the fund’s market exposure and volatility. For instance, a purchase or sale of a leveraged investment may result in losses in excess of the amount initially deposited as margin for the investment. This increased market exposure and volatility could have a material adverse effect on the return of the funds.

 

There are risks associated with the GLG Funds’ investments in derivatives.

 

The GLG Funds may make investments in derivatives. These investments are subject to a variety of risks. Examples of such risks may include, but are not limited to:

 

 

 

 

All of the GLG Funds depend on the services of prime brokers, custodians, administrators and other agents in connection with certain securities transactions. For example, in the event of the insolvency of a prime broker and/or custodian, the funds might not be able to recover equivalent assets in full as they will usually rank among the prime broker’s and custodian’s unsecured creditors in relation to assets that the prime broker or custodian borrows, lends or otherwise uses. In addition, the GLG Funds’ cash held with a prime broker or custodian may not be segregated from the prime broker’s or custodian’s own cash, and the GLG Funds may therefore rank as unsecured creditors in relation thereto.

 

GLG Fund investments are subject to numerous additional risks.

 

GLG Fund investments, including investments by its external fund of hedge funds products in other hedge funds, are subject to numerous additional risks, including the following:

 

 

The GLG Funds are subject to counterparty risk with regard to over-the-counter instruments which they may hold.

 

In the event of the insolvency of any counterparty or of any broker through which portfolio managers trade for the account of the GLG Funds, such as prime brokerage and custodian agreements to which certain of the GLG Funds are party, the funds may only rank as unsecured creditors in respect of sums due to them on the margin accounts or otherwise and any losses will be borne by the funds. The GLG Funds may also enter into currency, interest rate, total return or other swaps which may be surrogates for other instruments such as currency forwards and interest rate options. The value of such instruments, which generally depends upon price movements in the underlying assets as well as counterparty risk, will influence the performance of the GLG Funds and therefore a fall in the value of such instruments could have a material adverse effect on our business, results of operations or financial condition. In particular, certain GLG Funds frequently trade in debt securities and other obligations, either directly or on an assignment basis. Consequently, the GLG Funds will be subject to risk of default by the debtor or obligor in relation to their debt securities and other obligations, which could have a material adverse effect on our business, results of operations or financial condition.

 

The due diligence process that we will undertake in connection with investments by the GLG Funds may not reveal all facts that may be relevant in connection with an investment.

 

Before making investments, we will conduct due diligence that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. When conducting due diligence, we may be required to evaluate important and complex business, financial, tax, accounting, environmental and legal issues. Outside consultants, legal advisors, accountants and investment banks may be involved in the due diligence process in varying degrees depending on the type of investment. Nevertheless, when conducting due diligence and making an assessment regarding an investment, we will rely on the resources available to us, including information provided by the target of the investment and, in some circumstances, third-party investigations. The due diligence investigation that we will carry out with respect to any investment opportunity may not reveal or highlight certain facts that could adversely affect the value of the investment.

 

The GLG Funds make investments in companies that the GLG Funds do not control.

 

Investments by most of the GLG Funds will include debt instruments and equity securities of companies that the GLG Funds do not control. Such instruments and securities may be acquired by the GLG Funds through trading activities or through purchases of securities from the issuer. These investments will be subject to the risk that the company in which the investment is made may make business, financial or management decisions with which we do not agree or that the majority stakeholders or the management of the company may take risks or otherwise act in a manner that does not serve our interests. If any of the foregoing were to occur, the values of investments by the GLG Funds could decrease and our financial condition, results of operations and cash flow could suffer as a result.

 

Risk management activities may adversely affect the return on the GLG Funds’ investments.

 

When managing their exposure to market risks, the GLG Funds may from time to time use forward contracts, options, swaps, credit default swaps, caps, collars and floors or pursue other strategies or use other forms of derivative instruments to limit our exposure to changes in the relative values of investments that may

result from market developments, including changes in prevailing interest rates, currency exchange rates and commodity prices. The success of any hedging or other derivative transactions generally will depend on the ability to correctly predict market changes, the degree of correlation between price movements of a derivative instrument, the position being hedged, the creditworthiness of the counterparty and other factors. As a result, while the GLG Funds may enter into a transaction in order to reduce their exposure to market risks, the transaction may result in poorer overall investment performance than if it had not been executed. Such transactions may also limit the opportunity for gain if the value of a hedged position increases.

 

The GLG Funds may be subject to U.K. tax if GLG does not qualify for the U.K. Investment Manager Exemption.

 

Certain of the GLG Funds may, under U.K. tax legislation, be regarded as carrying on a trade in the United Kingdom through their investment manager, GLG Partners LP. It is our intention to organize our affairs such that neither the investment manager nor the group companies that are partners in the investment manager constitute a U.K branch or permanent establishment of the GLG Funds by reason of exemptions provided by Section 127 of the Finance Act 1995 and Schedule 26 of the Finance Act 2003. These exemptions, which apply in respect of income tax and corporation tax respectively, are substantially similar and are each often referred to as the Investment Manager Exemption (IME).

 

We cannot assure you that the conditions of the IME will be met at all times in respect of every fund. Failure to qualify for the IME in respect of a fund could subject the fund to U.K. tax liability, which, if not paid, would become the liability of GLG Partners LP, as investment manager. This U.K. tax liability could be substantial.

 

In organizing our affairs such that we are able to meet the IME conditions, we will take account of a statement of practice published by the U.K. tax authorities that sets out their interpretation of the law. A revised version of this statement was published on July 20, 2007. The revised statement applies with immediate effect, but under grandfathering provisions we may follow the original statement in respect of the GLG Funds until December 31, 2009 and, therefore, the revised statement has no impact until 2010. Furthermore, we believe that the changes in practice that have been introduced will not have a material impact on our ability to meet the IME conditions in respect of the GLG Funds.

 

Risks Related to Our Organization and Structure Following the Acquisition

 

The consummation of the acquisition could result in disruptions in business, loss of clients or contracts or other adverse effects.

 

The consummation of the acquisition may cause disruptions, including potential loss of clients and other business partners, in the business of GLG, which could have material adverse effects on our business and operations. Although we believe that GLG’s business relationships are and will remain stable following the acquisition, GLG’s clients and other business partners, in response to the consummation of the acquisition, may adversely change or terminate their relationships with us, which could have a material adverse effect on our business following the acquisition.

 

Since GLG is primarily operated in the United Kingdom, we may encounter risks specific to companies located outside the United States.

 

Since GLG is primarily operated in the United Kingdom, we will be exposed to risks that could negatively impact our future results of operations following the acquisition. The additional risks we may be exposed to in these cases include but are not limited to:

 

 

We will be a “controlled company” within the meaning of the New York Stock Exchange Listed Company Manual and, as a result, will qualify for, and intend to rely on, exemptions from certain corporate governance standards, which may limit the presence of independent directors on our board of directors or board committees.

 

Following the consummation of the acquisition, GLG’s Principals, their Trustees and certain other GLG Shareowners who have entered into a voting agreement will beneficially own our common stock and Series A preferred stock which collectively initially represent approximately 54% of our voting power (after giving effect to the co-investment and assuming no redemption of shares by Freedom stockholders and no exercise of outstanding warrants). Accordingly, they will have the ability to elect our board of directors and thereby control our management and affairs. Therefore, we will be a “controlled company” for purposes of Section 303(A) of the New York Stock Exchange Listed Company Manual.

 

As a “controlled company,” we will be exempt from certain governance requirements otherwise required by the New York Stock Exchange, including the requirement that we have a nominating and corporate governance committee. Under these rules, a company of which more than 50% of the voting power is held by an individual, a group or another company is a “controlled company” and is exempt from certain corporate governance requirements, including requirements that (1) a majority of the board of directors consist of independent directors, (2) compensation of officers be determined or recommended to the board of directors by a majority of its independent directors or by a compensation committee that is composed entirely of independent directors and (3) director nominees be selected or recommended for selection by a majority of the independent directors or by a nominating committee composed solely of independent directors. Following the consummation of the acquisition, we intend to utilize some of these exemptions. For example, we will not have a nominating committee. Accordingly, the procedures for approving significant corporate decisions can be determined by directors who have a direct or indirect interest in the matters and you will not have the same protections afforded to stockholders of other companies that are required to comply with the rules of the New York Stock Exchange. In addition, although we initially expect that a majority of our board of directors will consist of independent directors, we cannot assure you that we will not rely on the exemption from this requirement in the future.

 

Because of their ownership of approximately 54% of our voting power, GLG’s Principals, their Trustees and certain other GLG Shareowners will also be able to determine the outcome of all matters requiring stockholder approval (other than those requiring a super-majority vote) and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors, and could preclude any unsolicited acquisition of our company. In addition, because they collectively may determine the outcome of a stockholder vote, they could deprive stockholders of an opportunity to receive a premium for their shares as part of a sale of our company, and that voting control could ultimately affect the market price of our common stock.

 

Certain provisions in our proposed organizational documents and Delaware law will make it difficult for someone to acquire control of us.

 

Provisions in our organizational documents as proposed to be amended in connection with the acquisition will make it more difficult and expensive for a third party to acquire control of us even if a change of control would be beneficial to the interests of our stockholders. For example, our organizational documents will require advance notice for proposals by stockholders and nominations, place limitations on convening stockholder meetings and authorize the issuance of preferred shares that could be issued by our board of directors to thwart a takeover attempt. In addition, if approved by Freedom stockholders, the amendments to our organizational documents will require the affirmative vote of at least 662/3% of the combined voting power of all outstanding shares of Freedom capital stock entitled to vote generally, voting together as a single class, to adopt, alter, amend or repeal our by-laws; remove a director (other than directors elected by a series of preferred stock of Freedom, if any, entitled to elect a class of directors) from office, with or without cause; and amend, alter or repeal certain provisions of our certificate of incorporation which require a stockholder vote higher than a majority vote, including the amendment provision itself, or to adopt any provision inconsistent with those provisions.

 

Because of their ownership of approximately 54% of the our voting power, the Principals, their Trustees and certain other GLG Shareowners will be able to determine the outcome of all matters requiring stockholder approval (other than those requiring a super-majority vote) and will be able to cause or prevent a change of control of our company or a change in the composition of our board of directors, and could preclude any unsolicited acquisition of our company. Certain provisions of Delaware law may also delay or prevent a transaction that could cause a change in our control. The market price of our shares could be adversely affected to the extent that the Principals’ control over us, as well as provisions of our organizational documents, discourage potential takeover attempts that our stockholders may favor.

 

An active market for our common stock may not develop.

 

Our common stock is currently listed on the American Stock Exchange. We will apply to have our shares of common stock listed on the New York Stock Exchange under the symbol “GLG”. However, we cannot assure you that our shares will be approved for listing on the New York Stock Exchange or, if approved, that a regular trading market of our shares will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our shares will develop or be maintained, the liquidity of any trading market, your ability to sell your shares when desired, or at all, or the prices that you may obtain for your shares.

 

The value of our common stock may be adversely affected by market volatility.

 

Even if an active trading market develops, the market price of our shares may be highly volatile and could be subject to wide fluctuations. In addition, the trading volume in our shares may fluctuate and cause significant price variations to occur. If the market price of our shares declines significantly, you may be unable to resell your shares at or above your purchase price, if at all. We cannot assure you that the market price of our shares will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect the price of our shares or result in fluctuations in the price or trading volume of our shares include:

 

 

We may not be able to pay dividends on our common stock.

 

As a holding company, our ability to pay dividends will be subject to the ability of our subsidiaries to provide cash to us. We intend to distribute dividends to our stockholders and/or repurchase our common stock at such time and in such amounts to be determined by our board of directors. Accordingly, we expect to cause our subsidiaries to make distributions to their stockholders or partners, as applicable, in an amount sufficient to enable us to pay such dividends to our stockholders or make such repurchases, as applicable; however, no assurance can be given that such distributions or stock repurchases will or can be made. Our board can reduce or eliminate our dividend, or decide not to repurchase our common stock, at any time, in its discretion. In

addition, our subsidiaries will be required to make minimum tax distributions and intend to make limited partner profit share distributions to our key personnel pursuant to our limited partner profit share arrangement prior to distributing dividends to our stockholders or repurchasing our common stock. If our subsidiaries have insufficient funds to make these distributions, we may have to borrow funds or sell assets, which could materially adversely affect our liquidity and financial condition. In addition, our subsidiaries’ earnings may be insufficient to enable them to make required minimum tax distributions or intended limited partner profit share distributions to their stockholders, partners or members, as applicable, because, among other things, our subsidiaries may not have sufficient capital surplus to pay dividends or make distributions under the laws of the relevant jurisdiction of incorporation or organization or may not satisfy regulatory requirements of capital adequacy, including the regulatory capital requirements of the FSA in the United Kingdom or the Financial Groups Directive of the European Community. We will also be restricted from paying dividends or making stock repurchases under our credit facility in the event of a default or if we are required to make mandatory prepayment of principal thereunder.

 

Risks Related to the Acquisition

 

 

Our sponsors, Berggruen Holdings and Marlin Equities, have agreed to act together for the purpose of acquiring, holding, voting or disposing of our shares of common stock and are deemed to be a “group” for reporting purposes under the Exchange Act of 1934. As of June 30, 2007, our sponsors and their affiliates beneficially own, in the aggregate, 18.3% of our issued and outstanding shares of common stock (5.6%, in the aggregate, upon consummation of the co-investment and the acquisition). Messrs. Berggruen and Franklin are each deemed to beneficially own 9.1 % of the issued and outstanding shares of our common stock (2.8% upon consummation of the co-investment and the acquisition). All of the shares of our common stock that they are deemed to beneficially own and control are owned indirectly through their respective affiliates.

 

Our founders beneficially own warrants to purchase 16,500,003 shares of our common stock (21,500,003 shares of our common stock including the co-investment warrants to be purchased by our sponsors immediately prior to our consummation of a business combination). Of these warrants, 12,000,003 were purchased by our founders in a private placement for an aggregate purchase price of $25,000, and 4,500,000 were purchased by our sponsors for $4.5 million immediately prior to the consummation of our initial public offering. In light of the amount of consideration paid, our founders will likely benefit from the consummation of the acquisition, even if the acquisition causes the market price of our securities to significantly decrease. Furthermore, the $4.5 million purchase price of the 4,500,000 sponsors’ warrants will be included in the working capital that is distributed to our public stockholders in the event of our dissolution and liquidation. This may influence their motivation for promoting the acquisition and/or soliciting proxies for the adoption of the acquisition proposal. Our common stock and warrants had an aggregate market value (without taking into account any discount due to the restricted nature of such securities) of $      based on the closing sale prices of $      and $     , respectively, on the American Stock Exchange on the record date. These securities are subject to lock-up agreements and, subject to certain exceptions, may not be sold, assigned or transferred until at least one year after we consummate a business combination, and our founders have waived any rights to receive any liquidation proceeds that may be distributed upon our liquidation in respect of shares they acquired prior to our initial public offering. Therefore, if the acquisition proposal is not adopted and we are required to commence proceedings to dissolve and liquidate, the shares and warrants held directly or beneficially by our founders will be worthless.

 

In particular, in considering the recommendation of Freedom’s board of directors elsewhere in this proxy statement to vote “FOR” the acquisition proposal, you should also be aware that (i) all of Freedom’s directors other than Mr. Morey (due to auditor independence issues) will continue to serve as directors of Freedom following the acquisition and will be compensated for such service and (ii) if the acquisition is not approved and Freedom fails to consummate an alternative transaction within the time allotted, the shares of common stock and warrants held by Freedom’s directors will be worthless because Freedom’s directors are not entitled

to receive any of the net proceeds of Freedom’s initial public offering that may be distributed upon liquidation of Freedom. Freedom’s founders acquired shares of Freedom common stock prior to its initial public offering at a price per share of $0.00208. Freedom’s founders will therefore also benefit if the acquisition is approved. For example, the units and the warrants beneficially owned by the directors and officers of Freedom in the aggregate (after giving effect to the co-investment by Freedom’s sponsors) would be worth $      and $     , respectively, upon consummation of the acquisition and the unrealized profit from such securities would be $      and $     , respectively (in each case, based on an assumed market price of the units and the warrants of Freedom of $      and $     , respectively).

 

In addition, if we dissolve and liquidate prior to the consummation of a business combination, Messrs. Berggruen and Franklin, pursuant to certain written agreements executed in connection with our initial public offering, will be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of various vendors that are owed money by us for services rendered or products sold to us and target businesses who have entered into written agreements, such as a letter of intent or confidentiality agreement, with us and who have not waived all of their rights to make claims against the proceeds in the trust account. These personal and financial interests of our directors and officer may have influenced their decision as members of our board of directors to approve the acquisition proposal. In considering the recommendations of our board of directors to vote for the acquisition proposal, the pre-closing certificate amendment proposals and the post-closing certificate amendment proposal, you should consider these interests. Additionally, the exercise of our directors’ discretion in agreeing to changes or waivers in the terms of the acquisition may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interest.

 

The price of our common stock after the acquisition may be less than what you originally paid for your shares of common stock prior to the acquisition.

 

The market for common shares of companies in our industry may be volatile. Our common stock after the acquisition may trade at prices lower than what you originally paid for your corresponding shares of our common stock prior to the acquisition.

 

A substantial number of Freedom’s shares will be issued in connection with the acquisition and will become eligible for future resale in the public market after the acquisition, which will result in substantial dilution and could have an adverse effect on the market price of those shares.

 

We expect that 230,000,000 shares of Freedom common stock will be issued or reserved for issuance in connection with the acquisition. Upon consummation of the acquisition, there will be the economic equivalent of 294,800,003 shares of our common stock outstanding (299,800,003 shares upon issuance of the co-investment common stock). After giving effect to the acquisition and related transactions, the GLG Shareowners and GLG’s employees, key personnel and other individuals who receive securities in connection with the acquisition will, collectively, own securities that would (if fully converted or exchanged) represent approximately 72% of Freedom’s common stock on a fully diluted basis (exclusive of any stock-based awards that may be granted under the LTIP). Freedom’s existing stockholders would own approximately by 28% of Freedom’s common stock on a fully diluted basis (exclusive of any stock-based awards that may be granted under the LTIP). As of June 30, 2007, there were 64,800,003 shares of Freedom common stock issued and outstanding. As a result of the dilutive effect of the issuance of our stock in the acquisition, for purposes of illustration, a stockholder who owned 5.0% of Freedom’s outstanding shares of our common stock on June 30, 2007, would own approximately 1.1% of the outstanding shares of Freedom common stock immediately following the closing of the acquisition and after giving effect to the co-investment by Freedom’s sponsors and assuming no redemption of shares by Freedom stockholders and no exercise of outstanding Freedom warrants. Sales of substantial numbers of such shares in the public market could adversely affect the market price of such shares and of the warrants.

To complete the proposed acquisition, we will incur a large amount of debt, which will limit our ability to fund general corporate requirements and obtain additional financing, limit our flexibility in responding to business opportunities and competitive developments and increase our vulnerability to adverse economic and industry conditions.

 

We expect to incur up to $570.0 million of indebtedness to finance the proposed acquisition, transaction costs, deferred underwriting fees and our operations after the acquisition. As a result of the substantial fixed costs associated with these debt obligations, we expect that:

 

 

These debt obligations may also impair our ability to obtain additional financing, if needed, and our flexibility in the conduct of our business. Moreover, we expect that the terms of our indebtedness will restrict our ability to take certain actions, including the incurrence of additional indebtedness, mergers and acquisitions, investments at the parent company level and asset sales. Our ability to pay the fixed costs associated with our debt obligations will depend on our operating performance and cash flow, which will in turn depend on general economic conditions. A failure to pay interest or indebtedness when due could result in a variety of adverse consequences, including the acceleration of our indebtedness. In such a situation, it is unlikely that we would be able to fulfill our obligations under or repay the accelerated indebtedness or otherwise cover our fixed costs.

 

We expect to incur significant costs associated with the acquisition, whether or not the acquisition is completed, which will reduce the amount of cash otherwise available for other corporate purposes.

 

We expect to incur significant costs associated with the acquisition, whether or not the acquisition is completed. These costs will reduce the amount of cash otherwise available for other corporate purposes. We estimate that we will incur direct transaction costs of approximately $36 million associated with the acquisition, which will be included as a part of the total purchase cost for accounting purposes if the acquisition is completed. There is no assurance that the actual costs may not exceed these estimates. In addition, FA Sub 2 Limited and FA Sub 3 Limited may incur additional material charges reflecting additional costs associated with the acquisition in fiscal quarters subsequent to the quarter in which the acquisition was completed. There is no assurance that the significant costs associated with the acquisition will prove to be justified in light of the benefit ultimately realized. Although there are no compensation charges relating to the acquisition, we expect compensation and benefits to reflect the amortization of a significant non-cash equity-based compensation expense associated with the vesting of equity-based awards over the next five years, which under GAAP will reduce our net income and may result in net losses. As a result, as described under “Unaudited Pro Forma Condensed Combined Financial Information”, we will have negative net worth and net losses on a pro forma basis after the consummation of the acquisition.

 

There are significant limitations on our right to make damage claims against GLG and the GLG Shareowners for their breach of purchase agreement representations and warranties or covenants, under the indemnification provisions in the purchase agreement.

 

The purchase agreement gives us the right, after the closing, to make indemnification claims against the GLG Shareowners under certain circumstances. These include, among others, subject to in each case certain exceptions and limitations:

 

 

 

 

 

 

There are a number of limitations on our right to make indemnification claims for these matters. Some of these relate only to specified items referred to above; others apply generally to all of these items. These limitations are summarized in this proxy statement under the heading “The Purchase Agreement — Indemnification”. Among other things, these limitations include:

 

 

 

 

 

 

In addition, our ability to make indemnification claims against certain of the GLG Shareowners (referred to as “Designated Sellers”) are subject to further limitations as described under the heading “The Purchase Agreement — Indemnification”.

 

We do not have any operations, and GLG has never operated as a public company. Fulfilling our obligations as a public company after the acquisition will be expensive and time consuming.

 

GLG, as a private company, has not been required to prepare or file periodic and other reports with the U.S. Securities and Exchange Commission, or SEC, under the applicable U.S. federal securities laws or to comply with the requirements of U.S. federal securities laws applicable to public companies, such as Section 404 of the Sarbanes-Oxley Act of 2002. Although GLG maintains separate legal and compliance and internal audit functions, which along with its Chief Operating Officer, report on a day-to-day basis directly to its Co-Chief Executive Officer with further formal reporting to its Management Committee, and we have maintained disclosure controls and procedures and internal control over financial reporting as required under the U.S. federal securities laws with respect to our activities, neither GLG nor Freedom has been required to establish and maintain such disclosure controls and procedures and internal controls over financial reporting as will be required with respect to a public company with substantial operations.

 

Under the Sarbanes-Oxley Act of 2002 and the related rules and regulations of the SEC, as well as the rules of the American Stock Exchange, where we are currently listed, and the New York Stock Exchange, where we intend to apply for listing if the acquisition is consummated, we will be required to implement additional corporate governance practices and adhere to a variety of reporting requirements and accounting rules. Compliance with these obligations will require significant time and resources from our management and our finance and accounting staff, may require additional staffing and infrastructure and will significantly increase our legal, insurance and financial compliance costs. As a result of the increased costs associated with being a public company after the acquisition, our operating income as a percentage of revenue is likely to be lower.

We must comply with Section 404 of the Sarbanes-Oxley Act of 2002 in a relatively short timeframe.

 

After the acquisition, Section 404 of the Sarbanes-Oxley Act of 2002 will require us to document and test the effectiveness of our internal controls over financial reporting in accordance with an established control framework and to report on our management’s conclusion as to the effectiveness of these internal controls over financial reporting beginning with the fiscal year ending December 31, 2007. We will also be required to have an independent registered public accounting firm test the internal controls over financial reporting and report on the effectiveness of such controls for the fiscal year ending December 31, 2007 and subsequent years. In addition, the independent registered public accounting firm will be required to report on management’s assessment. Any delays or difficulty in satisfying these requirements could adversely affect future results of operations and our stock price.

 

We may incur significant costs to comply with these requirements. We may in the future discover areas of internal controls over financial reporting that need improvement, particularly with respect to any businesses acquired in the future. There can be no assurance that remedial measures will result in adequate internal controls over financial reporting in the future. Any failure to implement the required new or improved controls, or difficulties encountered in their implementation, could materially adversely affect our results of operations or could cause us to fail to meet our reporting obligations. If we are unable to conclude that we have effective internal controls over financial reporting, or if our auditors are unable to provide an unqualified report regarding the effectiveness of internal controls over financial reporting as required by Section 404, investors may lose confidence in the reliability of our financial statements, which could result in a decrease in the value of our securities. In addition, failure to comply with Section 404 could potentially subject us to sanctions or investigation by the SEC or other regulatory authorities.

 

The American Stock Exchange may delist our securities, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions.

 

Our securities are listed on the American Stock Exchange. We intend to seek to have our securities approved for listing on the New York Stock Exchange following consummation of the acquisition. We cannot assure you that our securities will continue to be listed on the American Stock Exchange, as we might not meet certain continued listing standards such as income from continuing operations, or that our securities will be approved for listing on the New York Stock Exchange. Additionally, until such time as we voluntarily delist from the American Stock Exchange in connection with the acquisition of GLG, the American Stock Exchange may require us to file a new initial listing application and meet its initial listing requirements as opposed to its more lenient continued listing requirements. We cannot assure you that we will be able to meet those initial listing requirements at that time.

 

If we fail to have our securities listed on the New York Stock Exchange, and the American Stock Exchange delists our securities from trading, we could face significant consequences including:

 

 

The failure to address actual or perceived conflicts of interest that may arise as a result of the investment by the Principals and other key personnel of GLG of at least 50% of the after-tax cash proceeds they receive in the acquisition in GLG Funds, may damage GLG’s reputation and materially adversely affect GLG’s business.

 

As a result of the significant amount that the Principals their Trustees, and GLG key personnel intend to invest in the GLG Funds after the completion of the acquisition, other investors in the GLG Funds may perceive conflicts of interest regarding investments in the GLG Funds in which the Principals their Trustees, and other key personnel of GLG are personally invested. Actual or perceived conflicts of interests could give rise to investor dissatisfaction or litigation and our reputation could be damaged if we fail, or appear to fail, to deal appropriately with these conflicts of interest. Investor dissatisfaction or litigation in connection with conflicts of interest could materially adversely affect our reputation and GLG’s business in a number of ways, including as a result of redemptions by investors from the GLG Funds and a reluctance of counterparties do business with us.

 

We may choose to redeem our outstanding warrants at a time that is disadvantageous to our warrant holders.

 

We may redeem the warrants issued as a part of our units at any time after the warrants become exercisable in whole and not in part, at a price of $0.01 per warrant, upon a minimum of 30 days’ prior written notice of redemption, if and only if, the last sales price of our common stock equals or exceeds $14.25 per share for any 20 trading days within a 30-trading day period ending three business days before we send the notice of redemption. Redemption of the warrants could force the warrant holders (1) to exercise the warrants and pay the exercise price therefor at a time when it may be disadvantageous for the holders to do so, (2) to sell the warrants at the then current market price when they might otherwise wish to hold the warrants or (3) to accept the nominal redemption price which, at the time the warrants are called for redemption, is likely to be substantially less than the market value of the warrants.

 

Our outstanding warrants may be exercised in the future, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders. This might have an adverse effect on the market price of our common stock.

 

Excluding 21,500,003 warrants beneficially owned by our founders (which includes 5,000,000 co-investment warrants), outstanding redeemable warrants to purchase an aggregate of 52,800,000 shares of common stock (100% of outstanding shares not held by our founders) will become exercisable after the later of the consummation of the acquisition or of another business combination, or December 28, 2007. These warrants would only be exercised if the $7.50 per share exercise price is below the market price of our common stock. To the extent they are exercised, additional shares of our common stock will be issued, which will result in dilution to our stockholders and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of our shares.

 

Risks Related to a Failure to Consummate the Acquisition

 

If you fail to vote or abstain from voting on the adoption of the acquisition proposal, you may not exercise your redemption rights to redeem your shares of Freedom common stock for a pro rata portion of the aggregate amount then on deposit in the trust account.

 

Stockholders holding shares of our common stock issued in our initial public offering who vote against adoption of the acquisition proposal may elect to have Freedom redeem their shares for cash equal to a pro rata portion of the aggregate amount then on deposit in the trust account (net of taxes payable on the interest earned thereon). Stockholders who seek to exercise this redemption right must submit their vote against adoption of the acquisition proposal and their election that Freedom redeem their shares for cash no later than immediately prior to the vote on the acquisition proposal at the special meeting. Any stockholder who fails to vote or who abstains from voting on the acquisition proposal may not exercise his or her redemption rights

and will not receive a pro rata portion of the aggregate amount then on deposit in the trust account upon redemption of such stockholder’s shares.

 

We may have insufficient time or funds to complete an alternate business combination if the acquisition proposal is not adopted by our stockholders or the acquisition is otherwise not completed.

 

Pursuant to our certificate of incorporation, among other things, we must complete a business combination with a fair market value of at least 80% of the sum of the balance of the trust account plus the proceeds of the co-investment by certain of our founders at the time of the business combination (excluding deferred underwriting discounts and commissions of approximately $18.0 million) by June 28, 2008 (or by December 28, 2008 if a letter of intent, agreement in principle or a definitive agreement has been executed by June 28, 2008 and the business combination relating thereto has not yet been consummated). If we fail to consummate a business combination within the required time frame, we will, in accordance with our certificate of incorporation dissolve, liquidate and wind up. The foregoing requirements are set forth in our certificate of incorporation and may not be eliminated without the vote of our board and the vote of at least a majority of the voting power of our outstanding voting stock. If the acquisition proposal is not adopted by our stockholders, we will not complete the acquisition and may not be able to consummate an alternate business combination within the required time frame, either due to insufficient time or insufficient operating funds. If we fail to consummate a business combination within the required time frame, we will be required to commence proceedings to dissolve and liquidate our assets. If we dissolve and liquidate before we consummate a business combination and distribute the trust account, our public stockholders will receive less than the unit offering price in our initial public offering of $10.00 and our warrants will expire and become worthless.

 

You may be held liable for claims by third parties against us to the extent of liquidating distributions received by you.

 

We will dissolve and liquidate if we do not complete a business combination by June 28, 2008 (or by December 28, 2008 if a letter of intent, agreement in principle or a definitive agreement has been executed by June 28, 2008 and the business combination relating thereto has not yet been consummated). Under the DGCL, stockholders may be held liable for claims by third parties against a corporation to the extent of distributions received by them in a dissolution conducted in accordance with the DGCL. We do not intend to comply with the procedures set forth in Section 280 of the DGCL, which prescribes various procedures by which stockholder liability may be limited. Because we will not be complying with Section 280, we will seek stockholder approval to comply with Section 281(b) of the DGCL, requiring us to adopt a plan of dissolution that will reasonably provide for our payment of (1) all existing claims, including those that are contingent and are known to us, (2) all pending proceedings to which we are a party and (3) all claims that may be potentially brought against us within the subsequent 10 years based on facts known to us.

 

However, because we are a blank check company, rather than an operating company, and our operations have been limited to searching for prospective target businesses to acquire, the only likely claims to arise would be from the vendors that we have engaged (such as accountants, lawyers, investment bankers, etc.) and potential target businesses. We have sought to have all vendors that we engage and prospective target businesses execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account. Although we have not received any such agreements, the claims that could be made against us should be significantly limited and the likelihood that any claim that would result in any liability extending to the trust is minimal. If our plan of distribution complies with Section 281(b) of the DGCL, any liability of stockholders with respect to a liquidating distribution is limited to the lesser of such stockholder’s pro rata portion of the claim or the amount distributed to the stockholder. Our plan of distribution in compliance with Section 281(b) of the DGCL does not bar stockholder liability for claims not brought in a proceeding before the third anniversary of the dissolution (or such longer period directed by the Delaware Court of Chancery). Accordingly, we cannot assure you that third parties will not seek to recover from our public stockholders amounts owed to them by us.

If we are unable to consummate a business combination within the prescribed time frames and are forced to dissolve and distribute our assets, you will receive less than $10.00 per share on distribution of trust account funds and our warrants will expire worthless.

 

If we are unable to complete a business combination and must dissolve and liquidate our assets, the per-share liquidating distribution will be less than $10.00 because of the expenses of our initial public offering, our general and administrative expenses and the costs of seeking a business combination. We expect these costs and expenses to include approximately $1.7 million for expenses for the due diligence and investigation of a target business or businesses; approximately $1.7 million for legal, accounting and other expenses associated with structuring, negotiating and documenting an initial business combination; an aggregate of up to $240,000 for office space, administrative services and secretarial support payable to Berggruen Holdings, Inc., an affiliate of Mr. Berggruen, representing $10,000 per month; $125,000 as a reserve for liquidation expenses; $60,000 for legal and accounting fees relating to our SEC reporting obligations; and approximately $75,000 for general working capital that will be used for miscellaneous expenses and reserves. If we are unable to conclude an initial business combination and expend all of the net proceeds of our initial public offering, other than the proceeds deposited in the trust account, and without taking into account interest, if any, earned on the trust account, net of income taxes payable on such interest and net of up to $3.9 million in interest income on the trust account balance previously released to us to fund working capital requirements, the initial per-share liquidation price would be $9.88, or $0.12 less than the per-unit offering price of $10.00. We cannot assure you that the actual per share liquidation price will not be less than $9.88.

 

In the event that our board of directors recommends and our stockholders approve our dissolution and the distribution of our assets and it is subsequently determined that our reserves for claims and liabilities to third parties are insufficient, stockholders who receive funds from our trust account could be liable up to such amounts to creditors. Furthermore, our outstanding warrants are not entitled to participate in a liquidating distribution and the warrants will therefore expire and become worthless if we dissolve and liquidate before completing a business combination.

 

If third parties bring claims against us, the proceeds held in trust may be reduced and the per share liquidation price received by you will be less than $9.88 per share.

 

Our placing of funds in trust may not protect those funds from third-party claims against us. Although we seek to have all vendors, prospective target businesses or other entities that we engage execute agreements with us waiving any right, title, interest or claim of any kind in or to any monies held in the trust account, not all vendors, prospective target businesses or other entities that we have engaged have executed such agreements, and there is no guarantee that all vendors, prospective target businesses or other entities that we engage in the future (if the acquisition is not completed) will execute such agreements, or if executed, that this will prevent potential contracted parties from making claims against the trust account. Nor is there any guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with us and will not seek recourse against the trust account for any reason. Accordingly, the proceeds held in trust may be subject to claims which would take priority over the claims of our public stockholders and, as a result, the per-share liquidation price could be less than $9.88 due to claims of such creditors. If we are unable to complete a business combination and are forced to dissolve and liquidate, each of Messrs. Berggruen and Franklin will, by agreement, be personally liable to ensure that the proceeds in the trust account are not reduced by the claims of prospective target businesses, vendors or other entities that are owed money by us for services rendered or products sold to us. Messrs. Berggruen and Franklin have provided us with documentation showing sufficient liquid assets with which they could meet their respective obligations.

 

Additionally, if we are forced to file a bankruptcy case or an involuntary bankruptcy case is filed against us which is not dismissed, the funds held in our trust account will be subject to applicable bankruptcy law, and may be included in our bankruptcy estate and subject to claims of third parties with priority over the claims of our public stockholders. To the extent bankruptcy claims deplete the trust account, we cannot assure you that we will be able to return to our public stockholders the liquidation amounts due them.

If we do not complete a business combination and dissolve, payments from the trust account to you may be delayed.

 

We currently believe that any dissolution and plan of distribution subsequent to the expiration of the 18 and 24 month deadlines would proceed in approximately the following manner:

 

 

In the event we seek stockholder approval for our dissolution and plan of distribution and do not obtain such approval, we will nonetheless continue to pursue stockholder approval for our dissolution. Pursuant to the terms of our certificate of incorporation, our powers following the expiration of the permitted time periods for consummating a business combination will automatically thereafter be limited to acts and activities related to dissolving and winding up our affairs, including liquidation. Pursuant to the trust agreement governing such funds, the funds held in our trust account may not be distributed except upon our dissolution and, unless and until the approval of our dissolution is obtained from our stockholders, the funds held in our trust account will not be released (other than in connection with the funding of working capital, a redemption or a business combination as described elsewhere in this proxy statement). Consequently, holders of a majority of our outstanding common stock must approve our dissolution in order to receive the funds held in our trust account and the funds will not be available for any other corporate purpose.

 

These procedures, or a vote to reject any dissolution and plan of distribution by our stockholders, may result in substantial delays in the liquidation of our trust account to our public stockholders as part of our plan of distribution.

 

Unless we complete a business combination, Mr. Berggruen and our other directors will not receive reimbursement for any out-of-pocket expenses they incur if such expenses exceed the amount of our available cash which is not in the trust account. Therefore, they may have a conflict of interest in determining whether GLG is appropriate for a business combination and in the public stockholders’ best interest.

 

Mr. Berggruen and our other directors will not receive reimbursement for any out-of-pocket expenses incurred by them to the extent such expenses exceed the amount not required to be retained in the trust account, unless the acquisition is consummated. Mr. Berggruen and our other directors have, as part of the acquisition, negotiated the repayment of some or all of any such expenses. The financial interest of Mr. Berggruen and our other directors could influence their motivation in selecting the acquisition and thus, there may be a conflict of interest when determining whether a particular business combination is in the stockholders’ best interest. In addition, the proceeds we receive from the co-investment may be used to repay the expenses for which Mr. Berggruen and our other directors may negotiate repayment as part of our business combination.

If we are unable to maintain a current prospectus relating to the common stock underlying our warrants, our warrants may have little or no value and the market for our warrants may be limited.

 

No warrants will be exercisable, and we will not be obligated to issue shares of common stock upon exercise of warrants by a holder unless, at the time of such exercise, we have a registration statement under the Securities Act of 1933, in effect covering the shares of common stock issuable upon the exercise of the warrants and a current prospectus relating to that common stock. We have agreed to use our best efforts to have a registration statement in effect covering shares of common stock issuable upon exercise of the warrants from the date the warrants become exercisable and to maintain a current prospectus relating to that common stock until the warrants expire or are redeemed. However, we cannot assure you that we will be able to do so. In addition, we may determine to exercise our right to redeem the outstanding warrants while a current prospectus relating to the common stock issuable upon exercise of the warrants is not available, in which case the warrants will not be exercisable prior to their redemption. Additionally, we have no obligation to settle the warrants for cash in the absence of an effective registration statement or under any other circumstances. The warrants may be deprived of any value, the market for the warrants may be limited and the holders of warrants may not be able to exercise their warrants if there is no registration statement in effect covering the shares of common stock issuable upon the exercise of the warrants or the prospectus relating to the common stock issuable upon the exercise of the warrants is not current.

 

Risks Related to Taxation

 

Our effective income tax rate depends on various factors and may increase as our business expands into countries with higher tax rates.

 

There can be no assurance that we will continue to have a low effective income tax rate. We are a U.S. corporation that is subject to the U.S. corporate income tax on its taxable income. Our low expected effective tax rate after the acquisition is primarily attributable to the asset basis step-up resulting from the acquisition and the associated 15-year goodwill amortization deduction for U.S. tax purposes. Going forward, our effective income tax rate will be a function of our overall earnings, the income tax rates in the jurisdictions in which our entities do business, the type and relative amount of income earned by our entities in these jurisdictions and the timing of repatriation of profits back to the United States in the form of dividends. We expect that our effective income tax rate may increase as our business expands into countries with higher tax rates. In addition, allocation of income among business activities and entities is subject to detailed and complex rules and depends on the facts and circumstances. No assurance can be given that the facts and circumstances or the rules will not change from year to year or that taxing authorities will not be able to successfully challenge such allocations.

 

U.S. persons who own 10% or more of our voting stock may be subject to higher U.S. tax rates on a sale of the stock.

 

U.S. persons who hold 10% or more (actually and/or constructively) of the total combined voting power of all classes of our voting stock may on the sale of the stock be subject to U.S. tax at ordinary income tax rates (rather than at capital gain tax rates) on the portion of their taxable gain attributed to undistributed offshore earnings. This would be the result if we are treated (for U.S. federal income tax purposes) as principally availed to hold the stock of foreign corporation(s) and the stock ownership in us satisfies the stock ownership test for determining controlled foreign corporation (CFC) status (determined as if we were a foreign corporation). A foreign corporation is a CFC if, for an uninterrupted period of 30 days or more during any taxable year, more than 50% of its stock (by vote or value) is owned by “10% U.S. Shareholders”. A U.S. person is a “10% U.S. Shareholder” if such person owns (actually and/or constructively) 10% or more of the total combined voting power of all classes of stock entitled to vote of such corporation. Following the acquisition, approximately 32.0% of our stock will be treated as directly or constructively owned by 10% U.S. Shareholders. Therefore, any U.S. person who considers acquiring (directly, indirectly and/or constructively) 10% or more of our outstanding stock should first consult with his or her tax advisor.

Our U.K. tax liability will be higher if the interest expense incurred by FA Sub 3 Limited cannot be fully utilized for U.K. tax purposes.

 

FA Sub 3 Limited is incurring debt to finance the acquisition and will be claiming a deduction for U.K. tax purposes for the interest expense incurred on such debt. If the interest expense incurred by FA Sub 3 Limited cannot be fully utilized for U.K. tax purposes against U.K. income, our U.K. tax liability might increase significantly. See also “Our tax position might change as a result of a change in tax laws.” below for a discussion of U.K. government proposals on interest deductibility.

 

Our tax position might change as a result of a change in tax laws.

 

Since we operate our business in the United Kingdom, the United States and internationally, we are subject to many different tax laws. Tax laws (and the interpretations of tax laws by taxing authorities) are subject to frequent change, sometimes retroactively. There can be no assurance that any such changes in the tax laws applicable to us will not adversely affect our tax position.

 

The U.K. government has recently published proposals with regard to the deductibility of interest expense incurred by U.K. tax resident entities. No assurances can be given that the U.K. government will not enact legislation that restricts the ability of FA Sub 3 Limited to claim a tax deduction for the full amount of its interest expense.

 

The U.S. Congress is considering changes to U.S. income tax laws which would increase the U.S. income tax rate imposed on “carried interest” earnings and would subject to U.S. corporate income tax certain publicly held private equity firms and hedge funds structured as partnerships (for U.S. federal income tax purposes). These changes would not apply to us because Freedom is already taxed in the United States as a U.S. corporation and GLG earns fee income and does not receive a “carried interest.” No assurances can be given that the U.S. Congress might not enact other tax law changes that would adversely affect us.

 

This proxy statement includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Our forward-looking statements include, but are not limited to, statements regarding our expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipates” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

 

The forward-looking statements contained in this proxy statement are based on our current expectations and beliefs concerning future developments and their potential effects on us and speak only as of the date of such statement. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” and the following:

 

 

 

 

 

 

 

 

 

 

 

 

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable law.