Bill Ackman of Pershing Square, Boaz Weinstein of Saba Capital Management, and Marc Lasry of Avenue Capital Group are among the prominent investors who are lobbying for the acquisition of Sculptor Capital, the successor to the legendary hedge fund Och-Ziff.
One of their key backers joined their cause on Thursday. Robert Shafir, Sculptor’s former CEO and a prominent stakeholder, informed the company’s special committee that he does not approve of the July arrangement the business made with the real estate investment firm Rithm Capital.
Class A shares of the company would be valued at $11.15, an increase of around 18% over their value on the day the transaction was announced. However, the hedge fund’s stock has dropped dramatically over a longer time frame, down by 60% over the previous two years.
Sculptor’s class A shares would be worth roughly $12.76 based on the consortium’s latest offer, which was made public on Wednesday.
The consortium’s proposal was turned down by Sculptor because, the company says, it is less likely to close than Rithm’s plan.
In a letter to the special committee, Mr. Shafir, who claims to control 6.2% of Sculptor’s class A shares, said that the consortium proposal is “clearly superior.” He continued, saying it’s “not credible to maintain the position that this group does not have the funds and resources to complete this transaction.”
The future of Sculptor’s management team, including CEO James Levin, will be a major sticking point in any purchase. Mr Levin was seen as the natural successor to Sculptor co-founder and former CEO Daniel Och, who resigned in 2018 after the business paid a $413 million settlement to resolve bribery accusations. However, Mr. Och has publicly backed Mr. Shafir, who was named CEO in 2018. In April of 2021, Mr. Levin officially became the leader.
In a letter to the board’s special committee this month, Mr. Och echoed the chorus of critics of Sculptor’s agreement with Rithm Capital, arguing that it “substantially undervalues” the company.
Sculptor claims that Mr. Och’s criticisms of the agreement “are based upon distortions and misrepresentations.” It says it “ran a robust sales process supported by world-class legal and financial advisers.”
A representative from Sculptor did not immediately provide comment.