Wall Street Stars Including Weinstein, Ackman Bid For Drama-Plagued Sculptor Capital

Author: Vandana Singh | August 21, 2023 08:39am

High-profile investors Boaz Weinstein, William Ackman, and Marc Lasry have presented a competing bid for hedge-fund firm Sculptor Capital Management Inc (NYSE:SCU), challenging a prior agreement to sell the firm to real-estate investment firm Rithm Capital Corp (NYSE:RITM) for approximately $639 million.

In late July, Sculptor agreed to sell to Rithm Capital at $11.15 per Class A share, an 18% premium on the firm's closing price. The original deal would have allowed Sculptor's current management, headed by CEO James Levin, to remain in place.

Weinstein's consortium, which had a previous offer rejected, has now increased its bid to more than $12 per share. If this new offer is successful, it will likely result in a change in management.

Sculptor Capital expressed concerns about the new bid, pointing out that the proposal only includes committed financing for less than half the required amount. 

However, the Weinstein group is confident in its financing, Wall Street Journal reported citing a source close to the matter.

Should Sculptor choose to terminate the agreement with Rithm for a superior offer, it could face a fee of about $16.5 million.

These recent developments mark the latest drama for Sculptor, which has seen controversies ranging from a bribery scandal to intense scrutiny over the CEO's pay. 

The firm, formerly known as Och-Ziff Capital Management, has stagnated amid these and other issues in the past decade.

Last week, Daniel Och, the company's second-largest shareholder, and some of his former partners expressed dissatisfaction with the sale to Rithm, arguing that it undervalued the company. 

Levin, the firm's largest shareholder with a nearly 14% stake, has also come under criticism for his pay, which amounted to $145.8 million in 2021, and for other governance-related matters.

Posted In: RITM SCU