Rithm Capital Corp. scrapped plans to increase its offer for Sculptor Capital Management Inc. to $12.20 a share after talks to secure Dan Och’s support fell apart as he publicly called a competing bid attractive.
(Bloomberg) — Rithm Capital Corp. scrapped plans to increase its offer for Sculptor Capital Management Inc. to $12.20 a share after talks to secure Dan Och’s support fell apart as he publicly called a competing bid attractive.
The initial bid of $11.15 a share, or $639 million, still stood as of Wednesday, Sculptor said in an amended proxy filing. That compares to an unsolicited rival offer of $13 a share from a consortium of ultra-wealthy suitors led by Saba Capital Management’s Boaz Weinstein.
Late last month, Rithm weighed boosting its bid to win support from Sculptor founder Och, who left the firm in 2019 and remains one of its largest shareholders. Their agreement, which was close to being finalized, collapsed this week, after Och read news reports about Weinstein’s latest bid and issued a statement saying the Weinstein bid appeared to be “more attractive” and urging Sculptor to engage with the consortium.
Rithm then decided to “discontinue engagement” with Och, according to the latest proxy statement, which was filed after US markets closed Thursday.
Read More: Sculptor Jumps as Weinstein Lifts Bid, Rithm Mulls New Offer
On Tuesday, Och asked Sculptor to provide the latest status on Weinstein’s proposed terms before he would sign the agreement to back Rithm’s bid. Sculptor declined to share that information until the Rithm offer papers were in “final form,” according to the proxy.
As of Wednesday, Sculptor was still evaluating Weinstein’s offer and would “continue to engage with Rithm regarding potential improvements” to its bid, according to the proxy.
Weinstein’s group includes billionaires Bill Ackman, Marc Lasry and Jeff Yass.
Under the consortium’s bid, an Office of the Chief Investment Officer would oversee all investment decisions. In addition to Weinstein and current Sculptor CIO Jimmy Levin, New Holland Capital CIO Mike Jacobellis and former King Street Capital partner Kieran Goodwin would also join the office of the CIO, according to the proxy.
Weinstein would have ultimate decision-making authority.
Shares of New York-based Sculptor fell 0.1% to $12.24 at 10:42 a.m. in New York. The stock has lost more than half of its value over the past two years.
Under the scrapped Rithm offer, Levin’s previously agreed upon limit of $30 million in annual pay would include all payments received in that calendar year. It also stipulated that if he decided to leave the firm, he would forfeit unvested deferred compensation and retention awards, and face a 12-month non-compete agreement.
Rithm also agreed to reimburse Och’s group for as much as $5.5 million in legal fees under the canceled offer.
–With assistance from Erin Fuchs.
(Updates with details from proxy starting in fourth paragraph)
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