On May 2, 2023, the Special Committee received a letter from the Former EMD Group, as previewed to representatives of J.P. Morgan and discussed at the meeting of the Special Committee on May 1, setting out the information requests regarding the proposed transaction with Bidder D, which were passed on to Bidder D.
On May 5, 2023, the Company filed its quarterly report on Form 10-Q, which reported that the Company was experiencing elevated redemption requests and negative impact on its ability to raise new capital from investors into its funds so far in 2023, which the Company believed was driven by a variety of factors, primarily the uncertainty and perceived instability relating to the disputes with the Former EMD Group.
Between May 2, 2023, and May 10, 2023, despite outreach at the direction of the Special Committee by representatives of PJT Partners, Bidder D did not engage substantively with the Special Committee, the Company or their respective advisors.
Bidder D had stated to J.P. Morgan over the course of the negotiation process that Bidder D was not willing to move forward with the potential transaction without the Former EMD Group’s support. With that context and following the lack of communication from Bidder D following its receipt of the Former EMD Group’s May 2 letter, the Special Committee authorized the Company to terminate exclusivity with Bidder D on May 11, 2023, and to engage with other potential acquirors regarding their willingness to consider a potential transaction that did not involve support of the Former EMD Group as a condition to signing or closing since this condition had been the gating item to executing a definitive merger agreement with respect to a potential transaction with Bidder D. Following termination of the Exclusivity Agreement, Bidder D discontinued its engagement with the Special Committee, the Company and their respective advisors regarding a potential transaction.
On May 11, 2023, at a meeting of the Special Committee with representatives of its financial and legal advisors and J.P. Morgan present, the Special Committee and representatives of PJT Partners, J.P. Morgan and Latham & Watkins discussed the termination of exclusivity with Bidder D and the Special Committee’s strategy for engaging with alternative potential acquirors regarding a potential transaction. After discussion, representatives of J.P. Morgan provided an overview of potential acquirors that may be interested in participating in a renewed bid process, including Rithm, Bidder B, Bidder E, Bidder H and Bidder J. Representatives of PJT Partners then led a discussion of the guidelines of the renewed bid process run by the Special Committee. After discussion, the Special Committee authorized J.P. Morgan to commence outreach on the basis discussed with the Special Committee.
On May 12, 2023, the Company’s management provided to the Special Committee an updated financial projection case of the Company following the consummation of a potential transaction, with assumptions, among others, that the then-existing corporate structure remained and that the Company generated sustained investment performance in its core strategies, and did not include any potential impacts from future market volatility, derivative actions, potential strategic growth opportunities, or synergies that may be pursued with a strategic partner or from being a private company (such financial projections, the “Transaction Forecasts”). On May 13, 2023, the Special Committee approved the Transaction Forecasts and authorized the Company’s management to share the Transaction Forecasts with Rithm (as well as other potential acquirors who remained involved in the process) to facilitate its due diligence with respect to a potential transaction. On May 15, 2023, the Company’s management provided the Transaction Forecasts to Rithm.
On May 16, 2023, J.P. Morgan, acting on instructions from the Special Committee, shared an updated version of the merger agreement with Rithm, Bidder H and Bidder J in the virtual data room. The updated draft merger agreement was in substantially the same form as had been negotiated with Bidder D and bidders were instructed that comments should be limited accordingly.
On May 23, 2023, at a meeting of the Special Committee with representatives of its financial and legal advisors and J.P. Morgan present, representatives of J.P. Morgan provided an update regarding the bid process in connection with the potential transaction, reporting that Rithm had conveyed that it intended to submit a proposal in the near term for a potential transaction which was not conditioned on the support of the Former EMD Group. Representatives of J.P. Morgan also communicated that both Bidder H and Bidder J conveyed that they remained interested in a potential transaction and were progressing their respective offers. Representatives of J.P. Morgan then noted that representatives of an asset management company not previously involved in the process (referred to as “Bidder K”) had contacted representatives of J.P. Morgan to express interest in a potential transaction.
On May 24, 2023, representatives of Rithm submitted an updated proposal to representatives of PJT Partners and J.P. Morgan to acquire the Class A Common Stock for $11.00 per share, subject to a number of assumptions and