Rithm Capital Stands Firm on Offer to Acquire Sculptor Capital Management

Real estate investment firm Rithm Capital is maintaining its original offer to acquire Sculptor Capital Management, despite a sweetened bid from a consortium led by investor Boaz Weinstein. The ongoing battle between the two groups will determine the future of Sculptor, the largest publicly traded hedge fund in the United States with $30 billion in assets.

According to a regulatory filing, Rithm Capital has stated that it is not prepared to make any improvements to the terms of the merger agreement signed in July, which offered to pay $11.15 per share or $639 million for Sculptor. Meanwhile, Sculptor’s special committee is currently evaluating the bid made by Bidder J, the consortium led by Weinstein and supported by billionaire hedge fund managers.

The filing comes in the wake of recent reports that Sculptor founder Dan Och and other former top executives have urged the hedge fund to disclose details about Weinstein’s offer. Sources close to Weinstein have indicated that he would be willing to pay approximately $13 per share for Sculptor.

Following the Reuters report, Rithm Capital decided to discontinue engagement with Och and his group, whose support is crucial for a successful deal, as stated in the filing. Representatives for Sculptor, Rithm Capital, Och, and Weinstein have either declined to comment or could not be reached for comment.

Sculptor’s stock price has experienced an approximately 8% increase since reports emerged of Weinstein’s raised bid from an earlier offer of $12.76. Weinstein is backed by billionaire investors Bill Ackman of Pershing Square Capital Management, Marc Lasry of Avenue Capital Group, and Jeff Yass, the founder of Susquehana International Group.

Och, who founded Sculptor (originally known as Och-Ziff Capital Management) in 1994, has been advocating for the release of all parties from their non-disclosure agreements, arguing that it is in the best interest of shareholders to have full information. This regulatory filing suggests that Weinstein’s offer is now being taken seriously, as Sculptor had previously stuck with the lower bid from Rithm Capital due to concerns about increased risk and uncertainty of closing.

The competing bids also present different paths for Jimmy Levin, Sculptor’s current chief investment officer. Rithm Capital intends to retain Sculptor’s leadership team, including Levin, while Weinstein’s proposal would place the assets under the oversight of an office of the chief investment officer, with Levin not continuing in a long-term role at the company, according to previous regulatory filings.

The battle for control of Sculptor Capital Management continues to unfold, captivating Wall Street as the future of the hedge fund hangs in the balance.