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America November 17, 2023 3 mins read

Rithm and Sculptor $720M Merger

America ı By Rihem Akkouche

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Rithm and Sculptor $720M Merger

In a remarkable twist of corporate fate, Rithm Capital Corp., a titan in real estate and financial services, and Sculptor Capital Management Inc., a master in alternative asset management, have successfully sealed their colossal $720 million merger. This pivotal moment, announced last Friday, marked the culmination of a complex saga that began in the heated corridors of the Delaware Chancery Court.

Rithm and Sculptor $720M Merger : A Financial Masterstroke

Originally heralded in July, this strategic alliance saw Rithm acquiring Sculptor at an impressive $12.70 per share, valuing the deal at a near astronomical $719.8 million. With the ink now dry, Sculptor is set to transition into a privately-held fortress under Rithm's banner.

Jimmy Levin, the strategic maestro and chief investment officer at Sculptor, expressed exhilaration over the merger. "Joining forces with Rithm," Levin stated, "heralds a new era of prosperity and success, energizing our mission to generate stellar returns for our investors."

Michael Nierenberg, the captain at the helm of Rithm Capital as chairman, CEO, and president, echoed this sentiment. He viewed the merger as a significant leap, propelling Rithm into a new phase of growth and evolution, poised to forge a global asset management juggernaut.

Legal Labyrinth: Navigating Shareholder Turbulence

The road to this merger was anything but smooth, strewn with legal challenges and shareholder dissent. The turbulence peaked when Sculptor settled a class action, a strategic move that quelled a brewing storm among shareholders mere days before the merger's closure. This settlement, shrouded in confidentiality, resolved a legal maze initiated in September by lead shareholder plaintiff Gilles Beauchemin, who had accused Sculptor's board of erecting barriers against potential competing bidders.

The initial merger announcement in late July had set the stage, with Rithm's original bid standing at $639 million, offering Sculptor shareholders a lucrative $11.15 per share. This blueprint evolved dramatically in October, when Sculptor's founding figures, led by Daniel S. Och, ignited a second class action, challenging the merger and alleging overlooked higher offers by a consortium led by Saba Capital Management.

The Final Turn: A Deal Reshaped

October 23 saw the legal dramas converge and intensify, but by October 27, a new chapter unfolded. Rithm upped its offer to an enthralling $719.8 million, a strategic increase of 13.9%. This revised offer pacified the founder group, leading to a withdrawal of their lawsuit and a vote in favor of the amended merger.

Rithm and Sculptor $720M Merger : The Advisory Ensemble

The merger was orchestrated by a league of legal eagles. Rithm was guided by Skadden Arps Slate Meagher & Flom LLP and Debevoise & Plimpton LLP, while Sculptor's journey was navigated by Ropes & Gray LLP, with Gibson Dunn & Crutcher LLP providing tax counsel, and Latham & Watkins LLP advising the special committee.

This merger between Rithm and Sculptor stands not just as a business transaction, but as a tale of strategic maneuvers, legal acrobatics, and financial foresight, setting a new benchmark in the world of asset management mergers.

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Rihem Akkouche

Rihem Akkouche is a passionate journalist dedicated to shedding light on compelling stories, sparking conversations, and fostering a more informed world.

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