A group of prominent investors, including Bill Ackman of Pershing Square, Boaz Weinstein of Saba Capital Management, and Marc Lasry of Avenue Capital Group, are actively seeking to acquire Sculptor Capital, the successor to the renowned hedge fund Och-Ziff. Surprisingly, this move comes even though Sculptor has already agreed to sell itself to another investment firm.
Notably, on Thursday, the consortium gained significant support from Robert Shafir, the former chief and a major shareholder of Sculptor. Mr. Shafir conveyed to a special committee advising Sculptor’s board that he would not endorse the deal the company struck with the real estate investment firm Rithm Capital in July.
Under the Rithm Capital deal, Sculptor’s class A shares would be valued at $11.15, representing an 18% increase since the announcement. However, the hedge fund’s shares have experienced a substantial decline of 60% over the past two years.
Contrarily, the consortium recently revealed their offer for Sculptor, valuing the company at approximately $12.76 per class A share.
Despite the consortium’s bid, Sculptor has rejected it, arguing that the deal is less likely to close compared to Rithm’s offer. Nevertheless, Mr. Shafir, who owns 6.2% of Sculptor’s class A stock, declared in a letter to the special committee that the consortium’s bid is “clearly superior” and expressed doubt in the claim that the group lacks the necessary funds and resources to complete the transaction.
One crucial point of contention in any potential deal will revolve around the future of Sculptor’s management team, particularly its CEO, James Levin. Previously seen as Daniel Och’s successor, the co-founder who resigned as CEO in 2018 following a bribery settlement, Mr. Levin has received support from Mr. Och’s camp. However, the consortium has proposed replacing Mr. Levin.
In fact, Mr. Och himself has voiced criticism of Sculptor’s deal with Rithm Capital, stating that it “substantially undervalues” the firm. In response, Sculptor has refuted Mr. Och’s critiques, asserting that they are based on distortions and misrepresentations. The firm maintains that it conducted a thorough sales process with the support of top-tier legal and financial advisors.
At present, there has been no immediate response from Sculptor in regards to a request for comment from their spokesperson.
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