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Institutional Shareholder Services (ISS), a proxy advisory firm, has issued a recommendation in favor of Rithm Capital Corp’s bid to acquire Sculptor Capital Management Inc., a struggling money manager. According to ISS, approximately 39.2% of Sculptor’s voting power has already committed to supporting the acquisition, and Rithm holds shares representing an additional 6.5%. ISS suggests that it is highly likely that the transaction will be approved.
Rithm initially offered $11.15 per share for Sculptor in July but subsequently raised its bid to $12.70 per share last month. ISS also expressed support for a “golden parachute” proposal for Jimmy Levin, Sculptor’s Chief Executive Officer and Head Investor.
A shareholder vote is scheduled for November 16, marking the culmination of a months-long bidding war for control of the hedge fund firm. In response to ISS’s recommendation, Sculptor announced that another proxy advisory service, Glass Lewis & Co., has also endorsed the deal. Glass Lewis emphasized that the proposed Rithm transaction currently represents the most viable option to maximize shareholder value.
However, there are potential challenges on the horizon. Two separate court hearings, set to occur shortly after the shareholder vote, have the potential to delay the deal. This could provide an opportunity for a consortium led by hedge fund manager Boaz Weinstein, whose higher offers have been repeatedly rejected by Sculptor. The court challenges might pave the way for Weinstein and his group of billionaire backers, including Marc Lasry, Jeff Yass, and Bill Ackman, to pursue an acquisition of Sculptor through a tender offer.
The outcome of the November 16 shareholder vote will be closely watched, as it will determine the next steps in this high-stakes battle for control of Sculptor Capital Management.
