Sculptor Capital Management Inc
Sculptor Capital Management — Merger or Acquisition (October 2023)
22 slides from Sculptor Capital Management's merger presentation, Oct 25, 2023
Slide 1: Rithm's Acquisition of Sculptor
Rithm’s Acquisition of Sculptor As of October 24, 2023
Slide 2: Important Notice
Important Notice This presentation does not constitute an offer to sell nor a solicitation of any offer to buy any securities of Sculptor Capital Management, Inc. and its consolidated subsidiaries (the “Company” or “Firm”) or any securities in any fund managed by the Company or its affiliates. Nothi
Slide 3: Rithm's Transaction Price Reflects Significant Premium to Unaffected Share Price
Rithm’s Transaction Price Reflects Significant Premium to Unaffected Share Price Rithm’s transaction price of $12.00 represents a 41% premium over the unaffected November 17, 2022 closing Class A share price of $8.50 and a 27% premium over the pre-initial announcement July 21, 2023 closing price of
Slide 4: Summary of the Rithm Transaction
Summary of the Rithm Transaction Transaction includes purchase of Sculptor Class A shares at $12.00 per share (including $52 million with respect to Class A shares owned by Rithm which will be cancelled for no consideration), purchase of Class A and A-1 Units of operating partnerships, assumption of
Slide 5: Special Committee Conducted Comprehensive and Independent Process
Special Committee Conducted Comprehensive and Independent Process 1 On May 23, 2022, Sculptor’s BOD established the SC comprised of independent, disinterested directors immediately following an unsolicited outreach from an institution regarding interest in a potential acquisition Strategic process w
Slide 6: Special Committee Process: Designed to Maximize Value to Class A Stockholders
Special Committee Process: Designed to Maximize Value to Class A Stockholders 1 The SC is completely independent and aligned with Class A stockholders The SC ran the process from start to finish, with procedures in place to ensure no improper influence or control exercised by management The SC’s adv
Slide 7: Strong Board Oversight Under Enhanced Governance Practices
Strong Board Oversight Under Enhanced Governance Practices Represents member of the SC Marcy Engel (Chairperson of Board) Joined the Board (independent director) in 2018 Previously COO and General Counsel of Eton Park Capital Management Senior legal roles at Salomon Smith Barney and Citi; led regula
Slide 8: Transaction Price Reflects Significant Premium to Unaffected Share Price
Transaction Price Reflects Significant Premium to Unaffected Share Price Represents share price as of November 17, 2022, the day prior to the day that the Company announced that a special committee of independent directors of the BOD had been formed Based on $594M Transaction Equity Value and 2024E
Slide 9: The Rithm Transaction Offers the Greatest Certainty of Closing
The Rithm Transaction Offers the Greatest Certainty of Closing 3 Closing Certainty Timing Certainty All regulatory approvals received Fund investor consent threshold of 85% has currently been met (although this is subject to change at the time of closing) Expected closing in 2023 promptly after rece
Slide 10: The Rithm Transaction Offers the Greatest Certainty of Closing
The Rithm Transaction Offers the Greatest Certainty of Closing 3 Throughout the process, the SC has clearly articulated to the Consortium the terms and conditions, in addition to price, that could lead to a superior offer: While the Consortium has continued to improve its non-binding proposals, it h
Slide 11: The Consortium's Non-Binding Proposal Places Material Closing Risk on Stockholders
The Consortium’s Non-Binding Proposal Places Material Closing Risk on Stockholders 3 The Consortium’s evolving set of changes to the investment process creates a material risk of significant client redemptions Clients invest in our firm (and others like it) based on our investment process, strategy
Slide 12: The Consortium Has Consistently Fallen Short of Putting Forth a Superior Proposal
The Consortium Has Consistently Fallen Short of Putting Forth a Superior Proposal Throughout the process, SC emphasized to bidders the importance of value to stockholders, available financing, timing and certainty of closing. The Consortium has not put forward a proposal determined to be superior ac
Slide 13: The Rithm Transaction Mitigates the Significant Risk of Standalone Prospects
The Rithm Transaction Mitigates the Significant Risk of Standalone Prospects of the Company 4 A stable client and employee base is vital to the success of the Company. Clients Retention of our clients is key to the ongoing success and financial condition of our Company Most of our revenue is from op
Slide 14: FEMDs Are Not Fully Aligned With The Interests of Class A Stockholders
FEMDs Are Not Fully Aligned With The Interests of Class A Stockholders 5 Negative Impact on Bidder Interest Frustration of Negotiation Process Pursuit of Preferential Terms At Expense of Other Stockholders Potentially chilling effect on the process participants’ interest due to perceived threats of
Slide 15: Public Narrative Around the SC Process is False and Misleading
Public Narrative Around the SC Process is False and Misleading Sculptor’s management dominated the SC’s sale process and multiple bids that did not retain management were turned down Sculptor’s management team exercised control over the sale process to benefit themselves and divert value from the st
Slide 16: Public Narrative Around the SC Process is False and Misleading (Cont'd)
Public Narrative Around the SC Process is False and Misleading (Cont’d) The Consortium is ready, willing and able to acquire the Company if only the Special Committee would play ball Mr. Levin will earn more under Rithm transaction than under the Consortium proposal The Consortium’s proposal does no
Slide 17: Consortium's proposal is not superior to the Rithm transaction
The Consortium’s non-binding proposal to acquire Sculptor, while presenting a nominally higher per share price, is not superior to the Rithm transaction given material signing and closing execution risk and timing issues. The Consortium has participated in Sculptor’s sale process since December 2022
Slide 18: Appendix | Background: Historical Stock Price and Key Firm Events
Appendix 18 | Background: Historical Stock Price and Key Firm Events 01 02 Summary Process Timeline 03 Illustrative Process & Framework of Institutional Capital Allocation
Slide 19: Background: Historical Stock Price and Key Firm Events
Background: Historical Stock Price and Key Firm Events 11/18/2022 Announced sale process and SC formation 2/2/2022 Morgan Rutman resigns from BOD 8/24/2022 FEMDs filed Section 220 claim 4/1/2021 Jimmy Levin becomes CEO 6/10/2020 Announcement of Jimmy Levin to become CEO 12/6/2018 Announcement of Dan
Slide 20: Summary Process Timeline
Summary Process Timeline The Special Committee conducted a rigorous and independent strategic sale process, which was impacted negatively by the public actions of FEMDs. Outreach Stage (Mid-Late Nov. 2022) Stage 1 (Nov. 2022 – Jan. 2023) Stage 2 (Jan. – Mid Feb. 2023) (1) The merger agreement was co
Slide 21: Summary Process Timeline (cont'd)
Summary Process Timeline (cont’d) Red shaded events represent actions of FEMDs Exclusivity with Bidder D (Feb. – May 2022) Post-Exclusivity Termination (May – July 2023) Post-Rithm Announcement (July – October 2023) May June July July (cont’d)-August September – Oct. October May 1, 2023: SC requeste
Slide 22: Illustrative Process & Framework of Institutional Capital Allocation
Illustrative Process & Framework of Institutional Capital Allocation Core Criteria Clients Evaluate Investment Managers On Source: Goldman Sachs Capital Introduction Q4 2019 Marketing & IR Manager Survey Investment Strategy: Objectives of the fund (i.e., returns and volatility) and the universe of a
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