Key Takeaways:
– Rithm Capital, the parent company of Newrez, has received approval from Sculptor’s founder Daniel S. Och and his group to acquire the asset management firm for $719 million.
– The support from Och’s group comes after a dispute among Sculptor’s shareholders, including competition from other investors such as Boaz Weinstein, Bill Ackman, Marc Lasry, and Jeff Yass.
– Och and his group initially filed a lawsuit opposing the deal, claiming it protected the current CEO rather than maximizing shareholder value.
– The merger agreement has been amended, with Rithm now offering $12.70 per share to Sculptor’s Class A shareholders, higher than their previous offers but lower than the $13.50 offered by the Weinstein group.
– The amended agreement includes Rithm waiving Sculptor’s client consent condition and a commitment from Och and other former EMDs to vote their shares in favor of the transaction and dismiss their pending litigation.
– The acquisition is expected to close shortly after the Sculptor stockholders’ meeting on November 16.
– Rithm’s CEO expects the deal to close in the fourth quarter of 2023 and is excited to complete the acquisition.
– The deal will add $34 billion of assets under management to Rithm, including real estate, credit, and multi-strategy investments, as part of their plan to become a leading global asset manager.
– Citi acted as the exclusive financial advisor to Rithm, while PJT Partners advised Sculptor’s special committee and JP Morgan Securities LLC advised Sculptor.
HousingWire:
New York-based Rithm Capital, the parent company of Newrez, has received the blessing of Sculptor’s founder Daniel S. Och and his group to acquire the asset management firm for $719 million, representing a 14% increase over the original bid.
The support comes three months after the deal was made public on Jul. 24. After the announcement, Rithm faced competition from a group of investors, including Boaz Weinstein, Bill Ackman, Marc Lasry and Jeff Yass, resulting in a dispute among Sculptor’s shareholders.
In early October, Och and his group filed a lawsuit opposing the deal, saying it aimed to protect current CEO Jimmy Levin rather than maximize shareholder value.
However, the companies disclosed on Friday they had amended the merger agreement. Rithm will pay $12.70 per share to Sculptor’s Class A shareholders, still lower than the $13.50 recently offered by the Weinstein group. However, it is higher than its previous offers of $11.15 and $12.
According to the amended agreement, Rithm will waive Sculptor’s client consent condition concerning all Sculptor funds, provided that the closing of the deal occurs on or before Nov. 17.
The companies announced that “Daniel S. Och and other former EMDs have executed a transaction support agreement under which they will vote their shares, representing an aggregate of approximately 15.2% of the outstanding Sculptor voting shares, in favor of the transaction. The group has also agreed to dismiss their pending litigation with prejudice.”
Following the group’s support, the acquisition is expected to close shortly after the Sculptor stockholders’ meeting scheduled for Nov. 16.
On Thursday, Michael Nierenberg, chairman, CEO and president of Rithm, told analysts that he expects the deal to close in the fourth quarter of 2023. He added that there’s “a lot of press around” the acquisition, but Rithm is “excited to get this thing wrapped up.”
Nierenberg commented on the deal after Rithm reported a $194 million GAAP net income in the third quarter of 2023 — lower than the $357.4 million the prior quarter.
The deal will bring to Rithm Sculptor’s $34 billion of assets under management, including real estate, credit and multi-strategy investing spectrum. It is part of the firm’s plan to become a leading global asset manager.
Citi acted as the exclusive financial advisor to Rithm. PJT Partners was the financial advisor to the Sculptor’s special committee. The sculptor’s financial advisor was JP Morgan Securities LLC.
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Property Chomp’s Take:
Hey there! Let’s talk about the recent news regarding Rithm Capital and its acquisition of asset management firm Sculptor. So, Rithm Capital, based in New York and the parent company of Newrez, has received approval from Sculptor’s founder, Daniel S. Och, and his group to acquire the firm for a whopping $719 million. This represents a 14% increase over the original bid.
This approval comes after a few months of back-and-forth between Rithm and a group of investors, including Boaz Weinstein, Bill Ackman, Marc Lasry, and Jeff Yass, who were competing for the acquisition. This resulted in a dispute among Sculptor’s shareholders. In October, Och and his group even filed a lawsuit opposing the deal, claiming that it aimed to protect the current CEO instead of maximizing shareholder value.
However, things have taken a turn as the companies recently disclosed that they have amended the merger agreement. Under the amended agreement, Rithm will pay $12.70 per share to Sculptor’s Class A shareholders, which is still lower than the $13.50 offered by the Weinstein group. But it is higher than Rithm’s previous offers of $11.15 and $12.
The amended agreement also states that Rithm will waive Sculptor’s client consent condition, provided that the deal closes on or before November 17. In addition, Daniel S. Och and other former EMDs (Executive Managing Directors) have executed a transaction support agreement, agreeing to vote their shares in favor of the transaction and dismiss their pending litigation.
With the group’s support, the acquisition is expected to close shortly after the Sculptor stockholders’ meeting scheduled for November 16. Michael Nierenberg, Chairman, CEO, and President of Rithm, expressed his excitement about wrapping up the deal during a recent analyst call. He mentioned that there has been a lot of press around the acquisition but assured that Rithm is eager to get it done.
The acquisition of Sculptor will bring Rithm a significant boost, as it will add $34 billion of assets under management to the company. These assets include real estate, credit, and multi-strategy investments, further solidifying Rithm’s position as a leading global asset manager.
In terms of financial advisors, Citi acted as the exclusive financial advisor to Rithm, while PJT Partners advised Sculptor’s special committee. JP Morgan Securities LLC served as Sculptor’s financial advisor.
All in all, this acquisition marks a significant milestone for Rithm Capital, positioning them as a major player in the asset management industry. We’ll keep an eye out for the closing of the deal, which is expected to happen in the fourth quarter of 2023.
