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Brookfield buying majority stake in Oaktree
Posted on Wednesday, 13 March 2019 15:55
Asset manager Brookfield has reached terms for an acquisition of a majority shareholding in New York-listed peer Oaktree.

Under the agreement, the buyer will pick up a 62.0 per cent stake in the business.

Brookfield, which will finance the acquisition using available liquidity, will pay USD 49.00 in cash per item of stock purchased, or alternatively, will issue 1.08 shares per unit acquired, thereby valuing the deal at USD 4.77 billion.

Oaktree’s board has already given its unanimous seal of approval to the transaction and recommended that shareholders accept the approach.

Completion also requires the green light from regulatory authorities and is slated to follow during the third quarter of 2019.

Both business will continue to operate independently under their existing brands upon closing.

Following completion of the transaction, the enlarged business will have combined assets under management of USD 475.00 billion and annual fee-related revenues of USD 2.50 billion.

Commenting on the purchase, Brookfield chief executive Bruce Flatt said: “This transaction enables us to broaden our product offering to include one of the finest credit platforms in the world, which has a value-driven, contrarian investment style, consistent with ours."

Based on Oaktree’s closing share price of USD 43.83 on 12th March, the last trading day prior to the deal being announced, Brookfield’s offer represents an 11.8 per cent premium.

The target’s stock was trading up at USD 48.97 as of 10:58 on 13th March, following news of the agreement.

Zephyr, the M&A database published by Bureau van Dijk, shows there have been 106 deals targeting portfolio management companies announced worldwide during 2019 to date.

Of these, the largest is worth USD 549.25 million and took the form of an acquisition of real estate manager Covivio’s non-strategic assets by an undisclosed investor.

Other companies in the sector to have been targeted this year include Sparinvest Holdings, Link Asset Services’ corporate and private client business and Eres Gestion.

© Zephus Ltd