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Tuesday, February 14, 2017

Fortress Investment Group (FIG) to be acquired by SoftBank Group for $3.3 billion


  • Fortress went public on the New York Stock Exchange in 2007, before the financial crisis. Fortress’s stock price is down 80% since it began trading. The stock dipped below $1, and the firm did not consistently return to profitability until 2012.
  • Under the terms of the deal, Fortress will become an independent subsidiary of SoftBank.
  • SoftBank will now oversee assets under management of $170 billion, making it one of the largest private investors in the world after the Blackstone Group (BX) , which manages about $330 billion.
  • SoftBank is known for its technology and telecom holdings with investments in Alibaba, Sprint Nextel Corp. and Yahoo! Japan Corp.

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    Fortress will operate within SoftBank as an independent business headquartered in New York. Fortress manages about $70 billion in assets and invests in real estate, credit and private equity.

    “Fortress’s excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform,” Masayoshi Son, Chairman and CEO of SoftBank Group said in a statement.

    In December, after a meeting with then president-elect Donald Trump, Son said SoftBank planned to invest $50 billion in the U.S. economy and add 50,000 jobs. It was not clear if the Fortress acquisition was part of those investment plans.

    "This is an investment in America, but it would be premature at this stage to say what the exact job impact will be," SoftBank spokesman Matthew Nicholson said in an email.

    In the Fortress deal, each 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 Monday. In addition, each Class A shareholder may receive up to two regular quarterly dividends prior to the closing, each in an amount not to exceed 9 cents a Share.

    Pete Briger, Wes Edens and Randy Nardone 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, according to a press release. They have also agreed to vote shares representing 34.99% of the outstanding Fortress voting shares held by them in favor of the transaction.

    ** charts before  announcement **








    ** chart 7 months after  announcement **

    The SoftBank acquisition was completed in the last week of December, for $3.3 billion to SoftBank Group Corp.

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