Summary
Ares Management Corp. (ARES) filed an 8-K on November 14, 2018, detailing the impending conversion of its legal structure from a Delaware limited partnership (Ares Management, L.P.) to a Delaware corporation (Ares Management Corporation). This structural change, approved by the board and set to be effective on November 26, 2018, will result in the conversion of existing partnership common shares into Class A common stock of the corporation. Holders of preferred shares will also see their holdings converted into preferred stock of the new corporate entity. This conversion is largely a legal and tax classification change, with the goal of simplifying the corporate structure. Importantly, the rights and obligations of common shareholders are intended to remain substantially similar, though the governance structure will shift from a general partner oversight to a traditional board of directors. The company will remain listed on the NYSE under its existing ticker symbols, and no action is required from existing shareholders. The company will continue to qualify as a "controlled company" under NYSE rules due to the anticipated shareholding structure.
Key Highlights
- 1Ares Management, L.P. is converting to a Delaware corporation, Ares Management Corporation, effective November 26, 2018.
- 2Partnership common shares will convert to Class A common stock, and Series A Preferred Shares will convert to Series A Preferred Stock.
- 3The conversion is a legal and tax classification change, with no anticipated action required from existing shareholders.
- 4The corporate governance will transition from a general partner model to a traditional board of directors.
- 5The company will continue to trade on the NYSE under existing ticker symbols 'ARES' and 'ARES.PRA'.
- 6Ares Management Corporation will qualify as a 'controlled company' under NYSE rules due to its ownership structure.
- 7The Class B and Class C common stock will be non-economic and primarily carry voting rights for specific entities.