B. Riley Financial, Inc.’s (RILY) stock is soaring on Wednesday following reports that Oaktree Capital is in advanced discussions to acquire a majority stake in two of its key businesses. According to Bloomberg, Oaktree is aiming to secure a 51% to 55% ownership in B. Riley’s appraisal and valuation services unit, along with its retail, wholesale, and industrial solutions division – entities previously known as Great American Group. B. Riley acquired these units back in 2014.
Sources familiar with the negotiations indicate that the deal could be valued around $380 million and an announcement might be made as early as next week. However, it’s important to note that the company hasn’t finalized the transaction, and there remains a possibility of alterations to the terms or even a last-minute failure to materialize.
This news comes amidst a turbulent period for B. Riley. Earlier this month, the company disclosed that it was exploring strategic alternatives for Great American Group. Last week, the company also received a preliminary non-binding proposal from its co-founder Bryant Riley.
These developments follow a period of significant stock decline for B. Riley, with its shares reaching a 10-year low after the company suspended its dividend, announced a potential record quarterly loss, and revealed an ongoing SEC investigation. According to Benzinga Pro, RILY stock has lost over 84% in the past year.
Despite the challenges, this potential acquisition from Oaktree offers a glimmer of hope for B. Riley’s future. If finalized, the deal would inject significant capital into the company and potentially boost investor confidence. It’s a move that warrants close attention as it could significantly impact the trajectory of B. Riley Financial.
