Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Daniel Och has agreed to support a rival’s buyout plan of Sculptor Capital Management, ending years of bitter fighting against the hedge fund he founded.
Sculptor said that Rithm Capital had agreed to boost its purchase price to $12.70 per Sculptor common share, valuing the company at about $719mn. Rithm, once an affiliate of Fortress Investment Group, first signed a deal to buy Sculptor in July at $11.15 per share, before boosting its bid to $12.00 last month.
Och, who has been outside the company’s management for the past four years, had been pressing Sculptor to consider a rival bid from a consortium including the hedge fund managers Boaz Weinstein and Bill Ackman.
The Weinstein group’s latest offer for Sculptor reached $13.50 per share, according to securities filings. However, Sculptor rejected each offer over concerns that many existing clients would withdraw their capital before a Weinstein deal could close and that in response, the Weinstein group would walk away from a transaction.
“We are pleased to reach this amended agreement with Rithm, which delivers a highly attractive premium to Sculptor stockholders, and appreciate the support of Mr Och and the other [founders] in achieving this outcome for stockholders,” said Marcy Engel, chair of the Sculptor board.
Och and a group of allied former executives at Sculptor have agreed to vote their collective 15 per cent stake in the company in favour of the Rithm deal. Och has agreed to drop litigation linked to the earlier Rithm deal.
A person familiar with the thinking of the rival bidding group told the FT that, between Och’s shares and the quarter of the company controlled by existing management and its allies, it was unlikely that the Weinstein group could successfully prevail over the Rithm deal.
Och founded what was known as Och-Ziff Capital Management in the 1990s after leaving Goldman Sachs. The firm went public in 2007 at a valuation of $12bn. But its fortunes changed in the aftermath of the financial crisis and it was eventually ensnared in a bribery scandal involving African governments.
In 2016, the firm paid $412mn to settle the charges, which Sculptor says led to Och’s removal as chief executive and Och-Ziff’s rebranding as Sculptor.
The company launched a sale process in 2022 as settlement between Och and Sculptor over a lawsuit where the founder challenged the company’s board over a $146mn pay package granted to chief executive Jimmy Levin, Och’s former protégé.
Och said he was “pleased to have helped negotiate a better outcome for Sculptor shareholders.
“I have known Michael Nierenberg [Rithm chief executive] for a long time, and I believe that he and his team will be proper stewards of the business for the benefit of investors, employees and shareholders.”
Read the full article here
