Omni Bridgeway (ASX:OBL) entered a framework agreement with funds managed by Ares Management to establish a continuation fund to acquire the company's co-investment in over 150 investments, according to a Wednesday filing with the Australian bourse.
Under the agreement, Ares will acquire a 70% stake in the fund for AU$310 million in cash, with Omni Bridgeway retaining a 30% interest, the filing said. It includes an option for Ares to acquire up to AU$35 million in Omni Bridgeway's stake through warrants.
Omni Bridgeway will receive an initial payment of AU$275 million payment from Ares Management, subject to approvals. It will also receive an annual management fee of 2% on gross investment commitments outstanding for the fund, continue managing the fund, and retain its profit rights.
The company said the proceeds will be used to retire debt and provide additional liquidity.
Shares of the company rose past 33% in recent Wednesday trade.
Price (AUD): $1.29, Change: $+0.32, Percent Change: +33.37%
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