Brookfield plans to buy Oaktree in €4.2bn deal
Brookfield Asset Management is to buy a 62pc stake in Oaktree Capital Group in a cash-and-stock deal valued at about $4.8bn (€4.2bn) the two asset managers said, sending Oaktree shares up 12pc on Wednesday morning.
Oaktree shareholders can choose to get either $49 in cash or 1.0770 Class A shares of Brookfield for each Oaktree share held. However, Brookfield said the total amount will be paid in 50pc stock and the rest in cash.
The cash offer represents an 11.8pc premium to Oaktree's Tuesday closing price.
"This transaction enables us to broaden our product offering to include one of the finest credit platforms in the world," Brookfield chief executive Bruce Flatt said.
Both companies will continue to operate as independent businesses, while Oaktree co-chairman Howard Marks would join Brookfield's board of directors.
When the deal completes, expected to be in the third quarter this year, the combined entity will have about $475bn of assets under management.
Oaktree shareholders, consisting primarily of its founders, certain members of management and employees, will own the remaining 38pc of the company.
Both Brookfield and Oaktree have been very active in Ireland. Brookfield's renewables arm has bought and sold a number of Irish wind farms, while the company has also invested in broadband firm Imagine.
Oaktree was instrumental in establishing listed housebuilder Glenveagh Properties, though it sold down its Glenveagh stake substantially when the company was looking to raise funds last year.
Glenveagh boss Justin Bickle said last week that this was because of the nature of private equity, where returns typically have to realised within a certain timeframe.