Wall Street Moguls Win Important Backer in Their Fight Over Hedge Fund Sale
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A coterie of high-profile investors, including Bill Ackman of Pershing Square, Boaz Weinstein of Saba Capital Management and Marc Lasry of Avenue Capital Group, is pushing to buy Sculptor Capital, the successor to the storied hedge fund Och-Ziff — even though the fund has already agreed to sell itself to another investment firm.
On Thursday, they gained an important supporter. The former chief and a major shareholder of Sculptor, Robert Shafir, told a special committee advising Sculptor’s board that he would not support the deal the company struck in July with the real-estate investment firm Rithm Capital.
That deal would value the firm’s class A shares at $11.15, around 18 percent more than they were worth the day it was announced. But shares of the hedge fund have fallen significantly over a longer period, dropping 60 percent over the past two years.
The consortium’s most recent offer for Sculptor, disclosed on Wednesday, would value it at about $12.76 for each of its class A shares.
Sculptor has rejected the consortium’s bid, arguing it is less sure to close than Rithm’s deal.
Mr. Shafir, who said he owns 6.2 percent of Sculptor’s class A stock, said in a letter addressed to the special committee that the consortium bid is “clearly superior.” He added that it is “not credible to maintain the position that this group does not have the funds and resources to complete this transaction.”
A key flashpoint in any deal will be the future of Sculptor’s management team, including its chief executive, James Levin. Mr. Levin had been widely viewed as an heir apparent to Daniel Och, Sculptor’s co-founder who stepped down as chief executive in 2018, two years after the company agreed to pay a $413 million fine to settle bribery charges. But Mr. Och threw his support behind Mr. Shafir, who was appointed chief executive in 2018. Mr. Levin ultimately took over the reins in April 2021.
The consortium has proposed replacing Mr. Levin.
Mr. Och this month joined the chorus of criticism of Sculptor’s deal with Rithm Capital, writing in a letter to the board’s special committee that the deal “substantially undervalues” the firm.
Sculptor has said that Mr. Och’s critiques of the deal “are based upon distortions and misrepresentations.” The firm contends it “ran a robust sales process supported by world-class legal and financial advisers.”
A spokesman for Sculptor did not immediately respond to a request for comment.