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FSAM

Fifth Street Asset

$4.55

-0.05 (-1.09%)

, OAK

Oaktree Capital

$47.65

-0.15 (-0.31%)

07:04
07/14/17
07/14
07:04
07/14/17
07:04

Fifth Street Asset signs asset purchase agreement with Oaktree

Fifth Street Asset Management (FSAM) announced that it has signed a definitive asset purchase agreement with Oaktree Capital Management, L.P., an affiliate of Oaktree Capital Group (OAK), under which Oaktree will become the new investment adviser to two Business Development Companies: Fifth Street Finance Corp. (FSC) and Fifth Street Senior Floating Rate Corp. (FSFR). Oaktree will pay gross cash consideration of $320M in cash to Fifth Street Management, an affiliate of FSAM, upon the close of the transaction. The shares of common stock of FSC and FSFR owned by Fifth Street Holdings L.P. are not included in the transaction. The transaction is expected to be completed in Q4. The transaction follows a strategic review conducted by the FSAM management team and board, including a Special Committee, in conjunction with legal and financial advisors, of a range of alternatives to maximize the value of the Fifth Street platform. A Special Committee of FSAM's Board of Directors, formed to review the asset sale transaction and related matters, and Board of Directors each unanimously determined that this transaction is in the best interest of FSAM and its stockholders. The new investment advisory agreements, which have been unanimously approved by the independent directors of the boards of directors of FSC and FSFR, are subject to approval by the stockholders of FSC and FSFR. The FSC and FSFR boards of directors unanimously recommend that the stockholders of each BDC vote in favor of the new investment advisory agreement with Oaktree and related corporate governance matters, including the new director nominees. FSH and Tannenbaum have agreed to vote their shares in favor of the proposed investment advisory agreements and related corporate governance matters, including the new director nominees. At the closing of the transaction, all current FSC board members except Richard P. Dutkiewicz, and all current FSFR board members except Richard W. Cohen, will resign. Each BDC board has nominated Marc H. Gamsin, Craig Jacobson, Richard G. Ruben and Bruce Zimmerman as new independent directors and John Frank, Vice Chairman of Oaktree, as a new interested director of the board, each of whom would take office upon approval of the stockholders and closing of the transaction. Mr. Frank is expected to serve as Chairman of each BDC board. The executive officers of FSC and FSFR will resign and will be replaced with certain individuals affiliated with Oaktree at the closing of the transaction. Following the closing of the transaction, FSAM's board currently intends to make an initial cash distribution to FSAM stockholders in the amount of approximately $2.75 per share of Class A common stock. In addition, FSAM's board currently expects that it will seek to approve in the future additional distributions to FSAM stockholders. The declaration of, the record date and timing of payment for, and the form and amount of, any anticipated dividends or distributions will be determined by FSAM's board at an appropriate time following the closing after taking into account all relevant factors, including regarding whether FSAM is able to satisfy the necessary legal tests required to make any such dividend or distribution. FSH and FSM have agreed to reimburse up to $5M of Oaktree's expenses incurred in connection with the transaction upon closing of the transaction. In addition, FSH and FSM have agreed to indemnify Oaktree, FSC and FSFR for certain liabilities following the closing. $42M of the cash purchase price will be escrowed at the closing to support these indemnification obligations. FSH has also agreed to pledge $35M of FSC common stock and $10M of FSFR common stock to support certain of these indemnification obligations.

FSAM

Fifth Street Asset

$4.55

-0.05 (-1.09%)

OAK

Oaktree Capital

$47.65

-0.15 (-0.31%)

FSC

Fifth Street Finance

$4.67

0.04 (0.86%)

FSFR

Fifth Street Senior

$7.98

-0.06 (-0.75%)

  • 27

    Jul

FSAM Fifth Street Asset
$4.55

-0.05 (-1.09%)

OAK Oaktree Capital
$47.65

-0.15 (-0.31%)

06/28/17
06/28/17
INITIATION

On The Fly: Top five analyst initiations
Catch up on today's top five analyst initiations with this list compiled by The Fly: 1. Altaba (AABA) initiated with an Overweight at JPMorgan. 2. Aetna (AET) and Humana (HUM) were initiated with a Buy at Citi. The firm also added Aetna to its Focus List. 3. CVS Health (CVS) and Walgreens Boots Alliance (WBA) were initiated with a Hold at Needham. 4. Oaktree Capital (OAK) initiated with a Hold at Jefferies. 5. General Motors (GM) resumed with an Overweight at Morgan Stanley. This list is just a portion of The Fly's analyst coverage. To see The Fly's full Street Research coverage, click here.
06/28/17
JEFF
06/28/17
INITIATION
Target $49
JEFF
Hold
Oaktree Capital initiated with a Hold at Jefferies
Jefferies analyst Gerald O'Hara started Oaktree Capital with a Hold rating and $49 price target. The analyst believes the shares at current levels are at or near fair value.
12/20/16
DBAB
12/20/16
DOWNGRADE
Target $40
DBAB
Hold
Oaktree Capital downgraded to Hold from Buy at Deutsche Bank
Deutsche Bank analyst Brian Bedell downgraded Oaktree Capital to Hold citing valuation following the recent rally in the shares. The analyst lowered his price target for the name to $40 from $44.
12/16/16
BOFA
12/16/16
DOWNGRADE
Target $45
BOFA
Neutral
Oaktree Capital downgraded to Neutral from Buy at BofA/Merrill
BofA/Merrill analyst Michael Carrier downgraded Oaktree Capital two notches to Underperform and lowered its price target to $45 from $50. The analyst said distress investing will be difficult and sees no meaningful catalyst for earnings growth near-term.
FSC Fifth Street Finance
$4.67

0.04 (0.86%)

05/15/17
DBAB
05/15/17
DOWNGRADE
Target $4.75
DBAB
Hold
Fifth Street Finance downgraded to Hold from Buy at Deutsche Bank
Deutsche Bank analyst George Bahamondes downgraded Fifth Street Finance to Hold citing uncertainty following CEO Patrick Dalton's resignation in April and the weaker than expected Q2 results. The analyst has a $4.75 price target for the shares.
03/30/17
RAJA
03/30/17
DOWNGRADE
RAJA
Underperform
Fifth Street Finance downgraded to Underperform at Raymond James
Raymond James analyst Robert Dodd downgraded Fifth Street Finance to Underperform from Neutral saying consensus estimates are too high and he sees risks from rising interest costs and to dividend coverage.
FSFR Fifth Street Senior
$7.98

-0.06 (-0.75%)

04/06/17
MAXM
04/06/17
DOWNGRADE
MAXM
Hold
Fifth Street Senior downgraded to Hold from Buy at Maxim
Maxim analyst Michael Diana downgraded Fifth Street Senior to Hold from Buy and removed his $9.50 price target on the shares after CEO Patrick Dalton resigned, saying that in his view the company now has no chief investment officer.
02/13/17
DBAB
02/13/17
DOWNGRADE
Target $9.25
DBAB
Hold
Fifth Street Senior downgraded to Hold from Buy at Deutsche Bank
Deutsche Bank analyst George Bahamondes downgraded Fifth Street Senior to Hold citing valuation with the shares trading at 85% of net asset value. The analyst lowered his price target for the shares to $9.25 from $10 following the company's Q1 results.

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