Oaktree Capital Eyes Major Stake in B. Riley Units
Oaktree Capital is in exclusive discussions to acquire a majority stake in two businesses owned by investment bank B. Riley. According to Bloomberg News, these talks were reported on Wednesday.
Details of the Potential Oaktree Capital and B. Riley Deal
Oaktree is negotiating to purchase a 51% to 55% stake in B. Riley’s appraisal and valuation services arm and its retail, wholesale, and industrial solutions unit. These entities were previously known as Great American Group. The deal could value these units at approximately $380 million, as reported.
The acquisition could be announced as early as next week. However, Oaktree Capital and B. Riley did not immediately respond to requests for comment.
Market Reaction
Following the news, shares in B. Riley Financial erased earlier losses and were up 12% in afternoon trading. This rebound occurred after a stock rout last week, triggered by expectations of a second-quarter loss.
Riley’s Recent Developments
In February, Lo Angeles-based B. Riley hired Moelis & Co. to assist with the review of strategic alternatives for its two businesses.
Riley stated on August 12, “Our review of strategic alternatives for Great American Group is advancing, and we look forward to providing additional updates when appropriate.” The company acquired Great American Group in 2014.
Last week, B. Riley revealed that it received a preliminary non-binding proposal from its co-founder, Bryant Riley, to take the company private. Currently, the company’s shares are trading at their lowest level in a decade, following the suspension of its dividend, the disclosure of a potential record quarterly loss, and an ongoing investigation by the US Securities and Exchange Commission.
As of the latest update, B. Riley Financial Inc. shares were trading at $7.83, reflecting a gain of $2.34 or 42.75%.
The ongoing talks between Oaktree Capital and B. Riley highlight a significant potential shift in the market. The outcome of these discussions could impact both companies and their stakeholders in the coming weeks.
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