Rithm holds firm on Sculptor bid, committee reviewing sweetened rival offer

By Svea Herbst-Bayliss

NEW YORK (Reuters) -Real estate investment firm Rithm Capital is sticking by its original offer to buy Sculptor Capital Management agreed in July, even as the hedge fund’s special committee evaluates a sweetened bid from a consortium headed by investor Boaz Weinstein, according to a regulatory filing made on Thursday.

The filing injects new drama into one of Wall Street’s most closely watched battles which will determine the future of Sculptor, the biggest U.S. publicly traded hedge fund with $30 billion in assets.

In the filing, Sculptor said Rithm on Wednesday was not prepared to offer any improvements to the terms of the merger, signed in July and offering to pay $11.15 a share or $639 million for the firm. The filing also said its special committee was “continuing to evaluate” the bid made by Bidder J, a consortium led by Weinstein and backed by billionaire hedge fund managers.

The filing comes just days after Reuters reported on October 3 that Sculptor founder Dan Och and other former top executives urged the hedge fund to release details about Weinstein’s offer.

Sources close to Weinstein said he would be willing to pay around $13 a share for Sculptor.

After the Reuters report, Rithm decided to “discontinue engagement” with Och and his group, whose support is crucial for a deal, the filing said.

Representatives for Sculptor, Rithm, Och and Weinstein either declined to comment or could not be reached for comment.

Sculptor’s stock price has climbed roughly 8% since reports surfaced that Weinstein, who runs Saba Capital, raised the bid from an earlier offer to pay $12.76.

Weinstein is backed by billionaire investors Bill Ackman who runs Pershing Square Capital Management, Marc Lasry who heads Avenue Capital Group and Jeff Yass who founded Susquehana International Group.

Och, who founded Sculptor which was originally called Och-Ziff Capital Management in 1994, has been pressing his old firm to release all parties from their non-disclosure agreements so that everyone can have full information, a move he argues is in shareholders best interest.

This filing suggests Weinstein’s offer is being taken seriously now. Previously the hedge fund stuck with the lower Rithm bid amid concerns the higher bid carried more risk, noting in a previous statement there was “significantly less certainty of closing.”

The bids also offer differing paths for Jimmy Levin, Sculptor’s current chief investment officer. Rithm would keep Sculptor’s leadership team, including Levin while Weinstein would have the assets overseen by an office of the chief investment officer and not have Levin continue in a long-term role at the company, according to previous regulatory filings.

(Reporting by Svea Herbst-Bayliss; additional reporting by Carolina Mandl editing by Diane Craft)