United States securities and exchange commission logo
September 11, 2023
Dava Ritchea
Chief Financial Officer
Sculptor Capital Management, Inc.
9 West 57th Street
New York, New York 10019
Re: Sculptor Capital
Management, Inc.
Preliminary Proxy
on Schedule 14A
Filed August 21,
2023
File No. 001-33805
Dear Dava Ritchea:
We have reviewed your filing and have the following comments. In
some of our
comments, we may ask you to provide us with information so we may better
understand your
disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your response and any amendment you may file in
response to these
comments, we may have additional comments.
Preliminary Proxy Statement filed August 21, 2023
Background of the Mergers, page 36
1. We note that, in
explaining its decision that the Consortium's proposal was not, or was not
reasonably expected to
lead to, a Superior Proposal, the Special Committee stated that the
Consortium was not in a
position to provide draft agreements or proposed changes to
employment arrangements
with Mr. Levin and Mr. Orbuch. We also note that you further
cite to the risk
related to client consent to a change of control which results in new
personnel or a new
"Office of the CIO" managing their money, even where such office
includes certain
members of the existing investment team in your additional definitive
proxy soliciting
materials filed August 30, 2023. Please describe any analysis you
undertook in assessing
the impact the retention of certain personnel may have on the client
consent condition under
the terms of the transaction with Rithm compared to those
proposed by the
Consortium. Disclose discussions, if any, surrounding the contemplated
Dava Ritchea
FirstName LastNameDava Ritchea
Sculptor Capital Management, Inc.
Comapany 11,
September NameSculptor
2023 Capital Management, Inc.
September
Page 2 11, 2023 Page 2
FirstName LastName
members of a new investment team under the proposed transaction with
the Consortium,
the qualifications of any such members, and why such new personnel may
result in a risk
to satisfying the change of control condition.
2. We note that in your additional definitive proxy soliciting materials
filed August 30, 2023,
you state that the Special Committee provided feedback to the
Consortium multiple
times. Please describe here the feedback provided and the material
discussions, if any,
that resulted from such feedback with the Consortium, including any
discussion regarding
financing of the proposed transaction with the Consortium. Disclose
any discussions
surrounding whether the Consortium would bear the risk of obtaining
client consents.
Please also describe the nature of the referenced client feedback. To
the extent that
Sculptor, the Board, and the Special Committee have continued to have
any contact with
the bidding parties since the proxy was originally filed, either
directly or through
representatives, please update this section or other appropriate
sections.
3. Please describe here the risk of not obtaining client consents and how
such risk increases
if the CLO Sale occurred immediately prior to the consummation of the
closing of a
potential transaction, as contemplated in the Consortium's Proposal.
4. We note your statement on page 58 that Mr. Levin is a "key man" for a
certain number of
client arrangements. We also note that one of the reasons presented by
the Special
Committee and Board for recommending the merger with Rithm was the
concern that the
Consortium would have difficulty achieving the required level of
client consents. Revise
your disclosure to state the percentage of client arrangements that
name Mr. Levin as a
"key man."
5. We note your determination that the offer from the Consortium was
unlikely to lead to a
superior proposal, in part because the Special Committee and Board
were concerned that
the client consent requirements contained in the Consortium's proposal
would create a
significant risk that the transaction would not close. Revise this
section to analyze any
material differences between the client consent requirements for the
Consortium's
proposal and the Rithm agreement. To the extent that the consent
requirements for one
transaction are materially different, please discuss how the Committee
and Board
determined that the Consortium's proposal contained a greater risk of
not closing.
6. In the last two paragraphs of this section, you indicate that the
Committee Committee and
Board determined not to continue to engage with the Consortium. You
also state that the
Board waived all "standstill" provisions. To the extent that Sculptor
continues to hold any
of the bidding parties to confidentiality or standstill provisions
that would impact their
ability to discuss their proposals, please clarify your disclosure in
an appropriate portion
of the proxy statement. The disclosure should address whether
Sculptor, the Special
Committee or Board believes that the confidentiality provisions remain
important to
protect the value of Sculptor's business.
7. We note press stories that have identified the significant parties
that are leading the
Consortium. Please provide us your analysis as to why you have not
identified those
Dava Ritchea
Sculptor Capital Management, Inc.
September 11, 2023
Page 3
parties. In particular, since you note that relying on equity guarantees
from the parties,
rather than a single entity like Rithm, is one of the factors that led
the Special Committee
and Board to conclude that the Consortium's bid presented significant
risks that meant that
it was unlikely to result in a Superior Proposal.
Purpose and Reasons of the Company for the Mergers; Recommendation of Our board
of
Directors and the Special Committee, page 66
8. We note in the Opinion of Financial Advisors starting on page 81, that
PJT Partners did
not consider the relative merits of the Transactions as compared to any
other business plan
or opportunity that might be available to you or the effect of any other
arrangement in
which you might engage. Similarly, we also note that J.P. Morgan's
opinion stated that
subsequent developments may affect such opinion and that J.P. Morgan does
not have any
obligation to update, revise or reaffirm such opinion. Please clearly
disclose here that the
fairness opinions did not compare the relative merits of the terms of the
transaction with
Rithm against the terms of any other proposed transaction.
9. The recommendation of both the Special Committee and the Board of
Directors was given
on July 23, 2023. We note that you go on to discuss factors that
shareholders should
consider, beginning on page 67. Among those factors include references to
the Proposal
from the Consortium, including as supplemented by the clarifications. You
state that the
Committee and Board discussed the proposal and clarifications on August
18. Revise the
proxy to discuss whether the Committee or Board has undertaken any
subsequent action to
consider new developments since July 23, including any need to confirm
its original
conclusion, or advise.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Madeleine Mateo at 202-551-3465 or Christian Windsor,
Legal Branch
Chief, at 202-551-3419 with any other questions.
Sincerely,
FirstName LastNameDava Ritchea
Division of
Corporation Finance
Comapany NameSculptor Capital Management, Inc.
Office of Finance
September 11, 2023 Page 3
cc: Harvey Eisenberg, Esq.
FirstName LastName