Sculptor Capital Management has agreed to an increased bid of $676 million from suitor Rithm Capital, the latest in a contentious battle for the hedge fund firm.
Sculptor stockholders would receive $12 a share, or 7.6% more than Rithm's July offer of $11.15, the companies said in a statement Oct. 12. The deal is less than a $12.20 offer Rithm was considering earlier this month but ultimately scrapped. A consortium of famed hedge fund managers led by Boaz Weinstein has bid at least $13.
The threshold of securing 85% of client support as measured by management fees has been met, and Sculptor's special committee unanimously approved the merger agreement, the statement said. Shareholders will have to vote on the deal, with a special meeting called for Nov. 16.
Sculptor shares rose 0.8% to $12.06 at 8:59 a.m. in New York.
Rithm's previous bid drew vocal opposition from Sculptor founder Dan Och, one of the firm's biggest shareholders, as well as other former executives. They had said they preferred the higher bid from Boaz Weinstein's consortium, which includes billionaires Bill Ackman, Marc Lasry and Jeff Yass. Och and other former executives hold about 30% of the firm's shares.
Sculptor's board "has been solely focused on consummating a transaction that maximizes value and certainty of closing for Sculptor stockholders," Marcy Engel, chair of Sculptor's board, said in the statement. "We are pleased to have been able to deliver a price increase and believe this transaction is in the best interest of Sculptor's stockholders."
In September, the consortium approached Sculptor with its higher offer, revised up from $12.76 a share, and also loosened its client-consent terms, agreeing to execute the deal even if all of the investors in its two hedge fund strategies reject it. Last week, Rithm scrapped plans to increase its offer to $12.20 a share after talks to win Och's support collapsed.
In an Aug. 31 statement, former Sculptor Chief Executive Officer Rob Shafir called Weinstein's bid "clearly superior," and a shareholder sued a week later.
Sculptor, led by Chief Executive Officer Jimmy Levin, had said Weinstein's offer is less attractive than Rithm's because of the risk that the firm's clients would object to Weinstein's move to replace him — thereby granting the group the option to back out from the deal. While Rithm plans to retain Levin, Weinstein's group has said it would demote him from his position as sole chief investment officer.
