Update 8:25pm: Adds Sculptor comment, rejection of latest offer.
A group of hedge fund investors led by Boaz Weinstein have made a rival offer to buy hedge fund Sculptor Capital Management for $12/share, topping a deal inked last month for $11.15 a share.
The group, which also includes Pershing Square’s Bill Ackman and Avenue Capital’s Marc Lasry, presented an offer during the sales process and has now increased its bid to $12 a share, according to a WSJ report on Sunday, which cited people familiar with the matter. Finacing for their offer is expecte to come from their personal funds, not from their firms’ cash.
The revised offer comes after Daniel Och and a group of Sculptor Capital (NYSE:SCU) shareholders said Wednesday that the company’s agreement to be sold to Rithm Capital (NYSE:RITM) for $639 million “substantially undervalues” the fund.
“We have received an unsolicited proposal from a third party that had participated in the strategic alternatives process,” Sculptor Capital (SCU) said in a statement late Sunday. “This bidder has not demonstrated adequate committed funding for any of its bids.”
Sculptor (SCU) said that while the new offer is higher than the Rithm (RITM) sale price, it only cludes committed financing for less than half of the amount required to consummate the transaction and underestimates the amount that would be necessary by several hundred million dollars, the fund added in the statement.
Sculptor (SCU) added that its Special Committee has not determined that the newest bid is, or is reasonably expected to lead to, a superior proposal to its announced agreement with Rithm (RITM). The sale ro Rithm is expected to close in Q4.
Famed hedge funder Och helped found Och-Ziff, which became Sculptor Capital Management (SCU).
If the Weinstein-led group succeeds in winning the bid for Sculptur (SCU), they are expected to install new management, while the Rithm deal would leave current management, led by CEO James Levin, in place, the WSJ said. Weinstein runs hedge fund Saba Capital Management.
The letter from Och and other holders from last week alleged that the special committee running the sale process may have excluded potential bidders before the Rithm (RITM) transaction was agreed to. They urged the committee to release all bidders from restrictions that would keep them from making their offers or indications of interest public.