Boaz Weinstein plans to bring Sculptor Capital Management Inc. under the umbrella of his own firm if he and his group of billionaire investors win a bid for the troubled money manager.
(Bloomberg) — Boaz Weinstein plans to bring Sculptor Capital Management Inc. under the umbrella of his own firm if he and his group of billionaire investors win a bid for the troubled money manager.
If the deal goes through, Sculptor would become part of Saba Capital Management but remain its own brand, according to people familiar with the plan. Weinstein’s fellow bidders include Bill Ackman, Marc Lasry and Jeff Yass.
The group’s revised offer for Sculptor includes language giving Weinstein “ultimate decision-making authority over investments,” Sculptor said Thursday in a regulatory filing. That’s among the reasons why Sculptor said it still prefers its deal with Rithm Capital Corp. even though the Weinstein-led bid, at $12.76 a share, is $1.61 higher than Rithm’s, Sculptor said.
While Rithm said it wouldn’t make any substantive alterations to the investment team, the Weinstein bid said that Jimmy Levin, the firm’s chief investment officer, would be just one member of the office of the CIO — if he decided to stay, according to the filing. Other members would include Weinstein, along with two other unidentified people with no relation to Sculptor or the bidders.
In the case of a disagreement over investments, Weinstein would make the final call as well as have the “authority to add or remove members” of the office, according to the filing, which refers to the Weinstein group as “Bidder J.”
The other members of Weinstein’s consortium might sit on the company’s board but wouldn’t be involved in day-to-day management.
Saba would collect fees by running a “tail-hedging strategy” for New York-based Sculptor, according to the people.
Sculptor said “a number of clients” had already raised concerns about potential for changes to the investment team. The firm also hired an asset-management consultant, which said the departure of “key persons” was a typical reason clients might pull their money. If clients representing more than half the assets in Sculptor’s hedge fund reject the deal, the Weinstein-led group could walk away.
Sculptor determined Wednesday that the revised bid wasn’t superior to Rithm’s. Weinstein’s coalition didn’t provide a “full-equity backstop” or deliver equity-commitment letters that covered the full amount of the transaction, according to the filing, citing another reason Sculptor wasn’t going with the Weinstein group.
–With assistance from Erin Fuchs.
(Updates with more information about bid starting in first paragraph.)
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