Morning Brief: SkyBridge, HNA Capital Call Off Deal

May 01, 2018   Stephen Taub

The alternative investment firm co-founded by Anthony Scaramucci and the Chinese conglomerate cited a lengthy approval process as a major reason.

Anthony Scaramucci’s deal to sell his fund-of-hedge funds firm SkyBridge Capital to China’s HNA Capital is officially off. The two firms announced Monday night that "is not in their business interests to pursue the transaction," originally announced in January 2017, citing the "significant time" that has passed since the transaction was first announced "and the uncertain timing of the approval process going forward."

The Wall Street Journal reported that the two firms were unwilling to meet the deal-closing requirements of the Committee on Foreign Investment in the U.S. (CFIUS). Scaramucci was reportedly expecting to personally receive roughly $100 million from the deal after SkyBridge on January 17, 2017 signed a deal to sell a majority stake to RON Transatlantic and HNA Capital. SkyBridge is also known for its SkyBridge Alternatives conference held annually in May in Las Vegas. This year’s event was cancelled earlier this year.

Scaramucci put the company up for sale when he thought he was going to get a job in the Trump Administration. He did spend 10 whirlwind days as communications director before he was fired following a profanity-laced, on-the-record interview with a reporter. In the press release, SkyBridge and HNA said they plan to explore a possible marketing and distribution arrangement of SkyBridge’s offerings in China. SkyBridge will continue to be led by its current senior management team, headed by Ray Nolte and Troy Gayeski. Scaramucci will return as co-managing partner to focus on strategic planning and marketing efforts.

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Wall Street analysts are bullish on streaming music company Spotify Technology, which went public last month. The stock had closed at $149.60, up 13.33 percent in its first day of trading after an unusual initial public offering whereby the shares of the Swedish company simply started to trade in what is called a direct listing.

On Monday, UBS set a $200 price target on the stock, asserting that the company is "poised for category leadership." It added that management execution "could widen that moat" over the next three to five years. "With an increasing ubiquity of smart devices globally, we see the adoption/monetization of streaming media as a key secular growth theme for investors," it added.

Morgan Stanley, one of Spotify’s lead bankers, set a price target of $190 in its report. "We believe we are in the early stages of a music renaissance in consumer spending, led by subscription streaming and Spotify," it stated in its report.

Chase Coleman’s Tiger Global Management owns more than 12.8 million shares, or 7.2 percent of Spotify’s total ordinary shares, according to a regulatory filing dated April 3. Of that sum, 1.255 million shares were registered. The shares are majority owned by Tiger Global Private Investment Partners IX, L.P. (PIP IX). In January, we reported that D.E. Shaw sold its stake of 12,000 shares in Spotify. Shares of Spotify rose more than 1 percent, to close at $161.67.

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Elliott Management Corp. is considering expanding into collateralized loan obligations (CLOs), according to Bloomberg. The firm has hired Brian McNamara, who formerly worked at GoldenTree Asset Management, to serve as a consultant as the firm tries to develop this business, according to the report. 

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ValueAct Capital’s Jeffrey Ubben has resigned from the board of directors of Twenty-First Century Fox, according to regulatory filings. He did not offer a reason. In a regulatory filing, the media giant said the resignation "is not due to any disagreement with the company on any matter relating to the company’s operations, policies or practices." As a result of Ubben’s resignation, the size of the board has been reduced to 12 directors. The activist hedge fund firm currently owns 53.3 million shares of the company, or 6.7 percent of the total outstanding.

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Shares of Och-Ziff Capital Management fell nearly 5 percent on Monday, to close at a new all-time low of just $1.95 a share.


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