Rithm Capital Corp, a New York-based asset manager focused on the real estate and financial services industries, is to acquire $34bn hedge fund firm Sculptor Capital Management in a transaction valued at approximately $639m.
Rithm Capital Corp, a New York-based asset manager focused on the real estate and financial services industries, is to acquire $34bn hedge fund firm Sculptor Capital Management in a transaction valued at approximately $639m.
Rithm has agreed to pay $11.15 per class A share of Sculptor, which represents a premium of 18% over the firm’s closing price on Friday, but is a fraction of the $12bn valuation the business – then called Och-Ziff Capital Management — listed its shares at in 2007.
The deal also brings to an end a feud between Sculptor founder Daniel Och and his former protégé Jimmy Levin.
In a lawsuit filed last year, Och, who handed over control of the business in 2018, but remained a large minority shareholder and investor in Sculptor’s private funds, challenged Levin’s lucrative remuneration agreement questioning why the board had agreed a $145m pay package in 2021 despite “a period of less than mediocre performance”.
The pair settled late last year after Sculptor launched a sale process using a special board committee that included Och. That board committee on Monday unanimously agreed to sell the firm to Rithm.
Rithm’s Board of Directors has also unanimously approved the transaction, which remains subject to customary closing conditions, including approvals by Sculptor’s shareholders.
Under the terms of the deal, Sculptor’s investment and leadership teams will continue in their roles with certain leaders having agreed to vote shares held by them, representing an aggregate of approximately 26% of the outstanding Sculptor voting shares, in favour of the transaction.
Upon completion of the transaction, Sculptor will operate as a subsidiary of Rithm and will continue to be led by Jimmy Levin, as CIO and Executive Managing Partner, reporting to Michael Nierenberg, Chief Executive Officer, President, and Chairman of Rithm.
Citi acted as the exclusive financial advisor to Rithm, and Skadden, Arps, Slate, Meagher & Flom and Debevoise & Plimpton LLP served as legal counsel to the firm. PJT Partners acted as financial advisor and Latham & Watkins LP acted as legal counsel to Sculptor’s Special Committee, while JP Morgan Securities LLC acted as financial advisor and Weil, Gotshal & Manges acted as legal counsel to Sculptor.
