Boaz Weinstein and his group of bidders sweetened their offer to buy Sculptor Capital Management, but the hedge fund firm said it still prefers its deal with Rithm Capital Corp.
Weinstein’s group, which includes billionaires Bill Ackman, Marc Lasry and Jeff Yass, increased its offer by 51 cents a share to $12.76. Rithm agreed to acquire Sculptor for $11.15 a share, or $639 million.
A Sculptor “special committee has not concluded that the consortium’s most recent revised proposal constitutes a superior proposal or is reasonably expected to lead to a superior proposal,” the New York-based firm said Wednesday in a statement, referring to the group as “Bidder J.”
Weinstein’s proposal, when compared with Rithm’s deal, continues to “lack certainty of closing and presents significantly higher execution risk” for Sculptor shareholders, according to the statement.
Matt Levine’s Money Stuff: Sculptor Is Full of Conflicts
Sculptor, led by Chief Executive Officer Jimmy Levin, said the deal is less attractive in part because of the risk that the firm’s clients won’t accept Bidder J’s choice to replace him. While Rithm plans to retain Levin, Weinstein’s group has said it would oust him, according to a proxy filing.
“The idea that sophisticated institutional investors undertaking extensive due diligence will simply consent to a change of control” that results in new management is “aspirational at best,” Sculptor said in the statement.
Read More: Sculptor Rebuffs Och Demand for Merger Records as ‘Vendetta’
Dan Och, who founded Sculptor, formerly known as Och-Ziff, opposed the Rithm deal along with four other former executives, arguing that it isn’t in shareholders’ best interests.
Shares of Sculptor rose 0.9% to $11.54 in extended trading at 4:53 p.m. in New York. The stock has lost more than half of its value in the past two years.
Och had positioned Levin to take over of the firm and paid him handsomely, but the two later fought over compensation and control. Och, who left in 2019 and remains one of Sculptor’s biggest shareholders, has been a critic of Levin’s pay ever since.
Levin, who became CEO in 2021, was awarded a $145.8 million compensation package for that year.
(Updates with additional Sculptor comment starting in fifth paragraph, share price in third-to-last.)