Rithm Capital Corp. agreed to buy Sculptor Capital Management Inc., the asset manager that had been embroiled in a legal dispute with Dan Och, in a deal valued at about $639 million.
(Bloomberg) — Rithm Capital Corp. agreed to buy Sculptor Capital Management Inc., the asset manager that had been embroiled in a legal dispute with Dan Och, in a deal valued at about $639 million.
Under the terms of the deal, Sculptor’s Class A shareholders will receive $11.15 per share in cash or they can choose to roll over their Sculptor stakes into partnership units in one or more Rithm subsidiaries, the companies said in a statement Monday. That’s about 18% higher than Sculptor’s Friday closing price.
Sculptor shares rose 16% to $10.92 at 8:52 a.m. in New York.
The Sculptor purchase “is a significant expansion into asset management,” Rithm Chief Executive Officer Michael Nierenberg said in a conference call. The deal is expected to close in the fourth quarter.
Sculptor and Chief Executive Officer Jimmy Levin had been battling Och, who founded the firm previously known as Och-Ziff, over Levin’s pay. In November, the two resolved the legal dispute and Sculptor formed a special committee to explore potential transactions.
Shares of Sculptor have tumbled in recent years, falling about 67% since the end of August 2021.
Sculptor will operate as a subsidiary of Rithm and be led by Levin, who will report to Nierenberg, according to the statement.
Och sued Sculptor in Delaware last year, demanding that the company turn over records related to Levin’s promotion to CEO and how the board determined his pay, which totaled $145.8 million in 2021.
Read More: Och Dredges Up Levin’s ‘Personal Issue’ in Hedge Fund Fight
The firm went public in 2007 and was one of the world’s largest hedge funds by 2016, with assets approaching $50 billion, when it was buffeted by scandal. That year, a unit pleaded guilty to a conspiracy charge as a part of a settlement of a long-running US probe into bribes paid to gain lucrative business in Africa.
The agreement included the US Securities and Exchange Commission sanctioning Och personally, and he paid a fine of almost $2 million. The firm’s deal with the SEC and the Department of Justice included $412 million in fines, penalties and disgorgements.
Organized as a real estate investment trust for tax purposes, Rithm manages $32 billion of assets and owns a portfolio of companies including a mortgage lender, a business lender and an appraisal company.
The New York-based firm was previously known as New Residential Investment Corp. and was tied to Fortress Investment Group before internalizing management in 2022.
(Updates share price in third paragraph, comments from Rithm in the third paragraph and background on Rithm in the last two paragraphs)
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