Oaktree Capital (OAK) - Get Report shares surged higher Wednesday after the global investment management firm said it sold nearly two thirds of its business to Brookfield Asset Management (BAM) - Get Report in a cash-and-stock deal valued at $4.8 billion.
Brookfield will acquire all outstanding Oaktree Class A units for either $49 per share in cash or 1.0770 Brookfield Class A shares, as well as 20% of Brookfield's class B shares. The purchase price represents a near 12% premium over Oaktree's Tuesday closing price and a nearly 16% premium over the stock's 30-day volume-weighted average price.
"As we continue to strategically grow Brookfield, we are thrilled to be partnering with Oaktree and with its exceptional management team whose credit business is second to none," said Brookfield CEO Bruce Flatt. "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."
Oaktree shares were marked 11.9% higher in early New York trading following news of the Brookfield deal and changing hands at $48.95 each. Brookfield shares were little-changed at $45.98 each.
"The opportunity to join forces with Brookfield is ideal. Our firms share a culture that emphasizes both investing excellence and integrity, and our businesses mesh without overlapping or conflicting," Oaktree Co-chairman Howard Marks said. "The rest of Oaktree management and I are excited about the combination of support and independence we expect. We look forward to having Brookfield's contribution to our ability to serve our clients, and to doing the same for them."
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