Boaz Weinstein and his group of bidders revised their offer to buy Sculptor Capital Management Inc., seeking to address some of the concerns the board’s special committee outlined last week, according to people familiar with the matter.
(Bloomberg) — Boaz Weinstein and his group of bidders revised their offer to buy Sculptor Capital Management Inc., seeking to address some of the concerns the board’s special committee outlined last week, according to people familiar with the matter.
While Weinstein’s bid remains at $12.76 a share, it has beefed up its equity commitments, eliminated risks associated with debt financing and increased the damages it would pay if it fails to complete the transaction, the people said.
Sculptor accepted Rithm Capital Corp.’s lower bid of $11.15 a share, or about $639 million, in July. It still preferred that offer as of a filing on Aug. 30, citing a variety of concerns about the higher bid from the other group.
It’s unclear whether Sculptor will be swayed by the amended proposal. A spokesperson for the New York-based hedge fund firm had no comment.
Shares of Sculptor rose 1.1% Thursday to close at $11.98 and have remained above Rithm’s offering price since the initial bid from Weinstein’s group, which Sculptor refers to in filings as Bidder J, was made public.
The group, which also includes billionaires Bill Ackman, Marc Lasry and Jeff Yass, sweetened its offer last week by 51 cents a share. Former Sculptor Chief Executive Officer Rob Shafir, who owns 6.2% of the firm’s Class A common stock, later issued a statement calling it “clearly superior” to the Rithm deal. The higher offer is also favored by Dan Och, who founded the firm previously known as Och-Ziff, and four other former executives.
Read more: Ex-Sculptor CEO opposes sale of hedge fund firm to Rithm
Sculptor, led by Chief Executive Officer Jimmy Levin, has said Bidder J’s proposal is less attractive in part because of the risk that clients won’t accept that suitor’s choice to replace him. While Rithm plans to retain Levin, Weinstein’s group has said it would oust him as chief investment officer.
Under the Rithm deal, Levin has the right to renegotiate his pay before October 2024, and if both sides fail to reach an agreement he has the right to leave the firm in January 2025 with all of his pay, including unvested awards, according to an Aug. 21 proxy filing.
Och had positioned Levin to take over the firm, and paid him handsomely, but the two later fought over compensation and control. Och, who left in 2019 and remains one of Sculptor’s biggest shareholders, has been a critic of Levin’s pay ever since.
Sculptor’s hedge fund gained 2.8% in August, boosting this year’s return to 12.6%, the firm said Thursday in a separate filing.
(Updates with closing share price in fifth paragraph.)
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