World News: 14:00 GMT Thursday 6th December 2018. [Och-Ziff Capital Management Group LLC via Globe Newswire via SPi World News]
Daniel Och and Former Executive Managing Directors Agree to Reallocate Significant Equity
Creates Long-Term Alignment for Current EMDs with Shareholders and Clients
Near-Term Debt Paydown and Restructuring to Facilitate Deleveraging
Elects to Change Tax Classification from Partnership to C-Corporation
Announces 1-For-10 Reverse Stock Split for Class A Shares
NEW YORK, Dec. 06, 2018 (GLOBE NEWSWIRE) -- Och-Ziff Capital Management Group LLC (NYSE: OZM) (the “Company,” or “Oz Management” or “Oz”) announced today a comprehensive strategic plan that includes a significant equity reallocation by Chairman Daniel S. Och and former executive managing directors to current executive managing directors, facilitates deleveraging of the Company’s balance sheet, and converts the Company’s tax classification from a partnership to a corporation.
Robert Shafir, Oz Chief Executive Officer, said, “We believe the suite of strategic actions we are announcing today solidifies Oz’s future, providing long-term stability and setting the firm on a path for continued success. By materially increasing equity ownership by the current partners and taking steps to enhance our capital structure, we expect to be better positioned to serve our clients.”
Mr. Och said, “The plan announced today is a positive outcome for the firm that underscores our collective focus on aligning incentives across the organization in order to achieve outstanding results for our shareholders and global clients. I look forward to moving on based on my confidence that Oz will be in good hands with Rob and his leadership team.”
Mr. Shafir continued, “Dan and the Oz founding partners have built an enduring firm with a culture of collaboration and a deeply rooted investment process that has generated strong risk-adjusted returns for our clients over many years. We appreciate the willingness of Dan and the former executive managing directors to transfer a substantial portion of their equity to further incentivize the firm’s next generation over the long term. We have a deep, long tenured team of over 100 investment professionals, including Jimmy Levin, who leads the investment team, and a seasoned executive team that are well-positioned to continue to deliver for our clients.”
Allan Bufferd, Independent Director and member of the Board since Oz went public, said, “It is a testament to the current and former partners that Oz has been able to perform through market cycles and has put in place a plan that charts a clear path forward. I would like to sincerely thank Dan for his support of the Company, and for this plan which creates strong alignment with clients and shareholders.”
In connection with this announcement, the Company is filing a Current Report on Form 8-K which includes additional information regarding the plan (including a copy of the Letter Agreement and term sheet entered into by the parties). Capitalized or quoted terms used and not defined in this press release are defined and/or described in the Form 8-K. Additional details about the plan and its impact to shareholders and clients are also included in an investor presentation, which is available at . The Company encourages current or potential shareholders to read the Form 8-K and investor presentation prior to making any investment decisions.
The Class A Shares will continue trading on a split-adjusted basis under the existing trading symbol “OZM” but, from the opening of the markets on January 4, 2019 they are expected to trade under a new CUSIP number. Based on the number of Class A Shares currently outstanding on December 4, 2018, the reverse stock split will reduce the number of Class A Shares from approximately 192 million pre-reverse split Class A Shares to approximately 19.2 million post-reverse split Class A Shares. The Class B shares will be subject to a similar reverse stock split.
All outstanding Class A restricted stock units outstanding under the Company’s equity-based compensation plans, as well as any common units or PSIs in the Oz Operating Group that are outstanding immediately prior to the reverse stock split will also be adjusted by the same 1 for 10 ratio.
The Company has retained its transfer agent, American Stock Transfer & Trust Company LLC (“AST”), to act as its exchange agent for the reverse stock split. AST will send shareholders of record holding physical share certificates as of the Effective Date a letter of transmittal providing instructions for the exchange of their share certificates. Shareholders owning shares via a broker or other nominee will have their positions automatically adjusted to reflect the reverse stock split, subject to brokers’ particular processes, and will not be required to take any action in connection with the reverse stock split. Please contact American Stock Transfer and Trust Company for further information at (800) 937-5449 or (718) 921-8317.
The restructuring contemplated by the plan described above (other than the reverse share split) are, unless otherwise mutually agreed by the Company and Mr. Och, subject to and conditioned upon, among other things, (i) approval by the holders of a majority of the minority of the holders of Class A Units (which for the avoidance of doubt does not include Mr. Och or any holders of Class A Units that will receive Class E Units); (ii) with respect to the amendment to the TRA described above, approval by the requisite beneficiaries under the TRA; (iii) approval of the senior lenders of the Company and its subsidiaries; (iv) the absence of a material adverse effect on the Company; (v) the execution of definitive release agreements by the applicable releasing parties; (vi) the receipt by Oz Management of a customary solvency opinion; (vii) the Company and its subsidiaries and certain current EMDs entering into binding Management Arrangements regarding commitments, compensation and restrictive covenants that are no less favorable than those set forth in the plan; and (viii) entry into of definitive documentation implementing the recapitalization and related transactions.
Any forward-looking statements contained in this press release are based upon historical information and on the Company's current plans, estimates and expectations. The inclusion of this or other forward-looking information should not be regarded as a representation by the Company or any other person that the future plans, estimates or expectations contemplated by the Company will be achieved.
The Company cautions that forward-looking statements are subject to numerous assumptions, estimates, risks and uncertainties, including but not limited to the following: global economic, business, market and geopolitical conditions; U.S. and foreign regulatory developments relating to, among other things, financial institutions and markets, government oversight, fiscal and tax policy; the outcome of third-party litigation involving the Company; the consequences of the Foreign Corrupt Practices Act settlements with the SEC and the U.S. Department of Justice; the Company's ability to implement the Conversion and the recapitalization and the other transactions described in this press release, including obtaining all applicable consents and approvals, satisfying all conditions to effectiveness on a timely basis or at all and reaching agreement on the further agreements relating to the implementation of all such transactions, and whether the Company realizes all or any of the anticipated benefits from the Conversion and the recapitalization; whether the Conversion and the recapitalization result in any increased or unforeseen costs or have an impact on the Company's ability to retain or compete for professional talent or investor capital; conditions impacting the alternative asset management industry; the Company's ability to retain existing investor capital; the Company's ability to successfully compete for fund investors, assets, professional talent and investment opportunities; the Company's ability to retain its active executive managing directors, managing directors and other investment professionals; the Company's successful formulation and execution of its business and growth strategies; the Company's ability to appropriately manage conflicts of interest and tax and other regulatory factors relevant to the Company's business; and assumptions relating to the Company's operations, investment performance, financial results, financial condition, business prospects, growth strategy and liquidity.
If one or more of these or other risks or uncertainties materialize, or if the Company's assumptions or estimates prove to be incorrect, the Company's actual results may vary materially from those indicated in these statements. These factors are not and should not be construed as exhaustive and should be read in conjunction with the other cautionary statements and risks that are included in the Company's filings with the SEC, including but not limited to the Company's Annual Report on Form 10-K for the year ended December 31, 2017, dated February 23, 2018, as well as may be updated from time to time in the Company's other SEC filings. There may be additional risks, uncertainties and factors that the Company does not currently view as material or that are not known. The Company does not undertake to update any forward-looking statement, because of new information, future developments or otherwise.
This press release does not constitute an offer of any Oz Management fund.
Globe Newswire: 14:00 GMT Thursday 6th December 2018
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