Sculptor Capital Management Inc. agreed to an increased bid of $676 million from suitor Rithm Capital Corp., the latest salvo in its fight with a consortium led by Boaz Weinstein to acquire the hedge fund firm.
(Bloomberg) — Sculptor Capital Management Inc. agreed to an increased bid of $676 million from suitor Rithm Capital Corp., the latest salvo in its fight with a consortium led by Boaz Weinstein to acquire the hedge fund firm.
Rithm boosted its offer to $12 a share, up 7.6% from its initial offer of $11.15 in July, and Sculptor shareholders are set to vote on the deal next month, the companies said Thursday in a statement. Weinstein and his group of billionaire backers made an unsolicited bid of $13 last week.
Shares of Sculptor rose 2.4% to close at $12.25, suggesting that shareholder approval of the latest agreement isn’t guaranteed and that the hedge fund firm could fetch a higher price.
Weinstein told Sculptor last month that he would initiate a tender offer for $12.25 if shareholders don’t vote on a deal by Dec. 22, when his standstill agreement with the firm expires. But on Thursday, Sculptor set the vote for Nov. 16. That may preempt Weinstein from pursuing a tender offer — unless a Delaware judge overseeing a shareholder lawsuit against Sculptor rules that the company’s non-disclosure and standstill agreements should be scrapped.
Rithm’s initial bid drew vocal opposition from Sculptor founder Dan Och, one of the firm’s biggest shareholders, as well as other former executives. They said the higher bid from Weinstein, the Saba Capital Management founder whose consortium includes billionaires Bill Ackman, Marc Lasry and Jeff Yass, seemed to be superior. Och and his allies hold about 30% of the firm’s shares. Sculptor’s current management, which backs Rithm’s bid, also controls about 30%.
Sculptor’s board “has been solely focused on consummating a transaction that maximizes value and certainty of closing for Sculptor stockholders,” Marcy Engel, the chairperson of the hedge fund firm’s board, said in the statement. “We are pleased to have been able to deliver a price increase and believe this transaction is in the best interest of Sculptor’s stockholders.”
Representatives for Och and Weinstein didn’t comment.
At least 85% of Sculptor’s clients, as measured by management fees paid, support the Rithm offer, according to the statement. Anything less, and Rithm would be free to walk away. A special meeting of shareholders to vote on the deal is set for Nov. 16.
Last week, Weinstein’s consortium approached Sculptor with its $13-a-share offer, up from a previous bid of $12.76. The group also loosened its client-consent terms, agreeing to execute the deal even if all of the investors in Sculptor’s two hedge fund strategies reject it. Rithm then dropped the plan to increase its offer to $12.20 a share after talks to win Och’s support collapsed.
Och, who left Sculptor in 2019, has been locked in a bitter feud with Chief Executive Officer Jimmy Levin over compensation and control. While Rithm plans to retain Levin, Weinstein’s group has said it would oust him as chief investment officer.
–With assistance from Erin Fuchs, Steve Dickson, Daniel Taub and Jef Feeley.
(Updates with closing share price in third paragraph, potential tender offer in fourth, CEO Levin in last.)
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