Japan’s SoftBank Group to acquire Fortress Investment Group for $3.3 billion in cash to become a player in real estate market
SoftBank Group Corp. and Fortress Investment Group LLC (“Fortress”) announced that they have entered into a definitive merger agreement under which SoftBank will acquire Fortress for approximately $3.3 billion in cash.
Under the terms of the merger agreement, which was unanimously approved by a Special Committee of Independent Directors of Fortress’s Board of Directors and Fortress’s full Board of Directors, each Fortress Class A shareholder will receive $8.08 per share, which represents a premium of 38.6% to the closing price of Fortress Class A common stock on February 13, 2017, and a premium of 51.2% to Fortress’s 3-month volume-weighted average price, excluding dividends. In addition, each Fortress Class A shareholder may receive up to two regular quarterly dividends prior to the closing, each in an amount not to exceed $0.09 per Class A Share. Fortress plans to maintain its current base dividend of $0.09 per share for the fourth quarter of 2016 and, if closing does not occur prior to the applicable payment date, for the first quarter of 2017.
Pete Briger, Wes Edens and Randy Nardone (the “Fortress Principals”) have agreed to continue to lead Fortress, and have committed to invest 50% of their after-tax proceeds from the transaction in Fortress-managed funds and vehicles, underscoring a deep alignment with the interests of Fortress’s limited partner investors, and in equity securities of SoftBank and SoftBank-managed funds and vehicles. In addition, the Fortress Principals have agreed to vote shares representing an aggregate of 34.99% of the outstanding Fortress voting shares held by them in favor of the transaction.
Fortress’s senior investment professionals will remain in place and will retain their significant participation interests in fund performance. Fortress will operate within SoftBank as an independent business headquartered in New York, and SoftBank is committed to maintaining the leadership, business model, brand, personnel, processes and culture that have supported Fortress’s success to date.
“Fortress’s excellent track record speaks for itself, and we look forward to benefitting from its leadership, broad-based expertise and world-class investment platform,” said Masayoshi Son, Chairman and CEO of SoftBank Group Corp. “For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world class execution to drive sustainable long-term growth.”
“SoftBank is an extraordinary company that has thrived under the visionary leadership of Masayoshi Son,” said Fortress Co-Chairmen Pete Briger and Wes Edens. “We are very pleased to announce an agreement setting our business on a great path forward as part of SoftBank, while creating significant value for our shareholders. We join a company with tremendous scale and resources, and a culture completely aligned with our focus on performance, service and innovation. We anticipate substantial benefits for our investors and business as a whole, and we have never been more optimistic about our prospects going forward.”
Under the terms of the agreement, SoftBank can bring in partners for a portion of the investment. Nizar Al-Bassam and Dalinc Ariburnu of F.A.B. Partners, who arranged the transaction, will continue to advise SoftBank with respect to Fortress.
The transaction is subject to approval by Fortress shareholders, certain regulatory approvals and other customary closing conditions, and is expected to close in the second half of 2017.