Oaktree investors get sharp end of the stick

Brookfield Asset Management on March 13 said it had agreed to acquire 62 percent of Oaktree Capital for approximately $4.8 billion in cash and shares.

The Toronto-based company is offering $49 a share, or just under 1.1 Brookfield Class A shares, for each Class A unit of Oaktree, under an election process that will have half of the consideration paid in cash and half in shares. The offer represents a 12 percent premium to Oaktree’s closing price on March 12.

Howard Marks will continue as co-chairman of Oaktree, Bruce Karsh as co-chairman and chief investment officer, and Jay Wintrob as chief executive officer, while Marks and Karsh will have operating control of Oaktree as an independent entity for the foreseeable future. Those executives and other employee unit-holders will be able to sell their units to Brookfield beginning in 2022.

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