8-KMaterial AgreementsSecurities & ListingShareholder Matters+3

Ares Management Corp 8-K Report, Material Agreement (Mar 30, 2020)

Filed March 30, 2020For Securities:ARESARES-PB

Summary

Ares Management Corporation (ARES) has announced a material definitive agreement through an 8-K filing on March 30, 2020, detailing a share purchase transaction with Sumitomo Mitsui Banking Corporation (SMBC). The agreement involves the sale of approximately $383.8 million of newly issued Class A Common Stock to SMBC, with the transaction expected to close on March 31, 2020. This transaction also includes the creation of a new series of non-voting common stock, which SMBC may exchange its newly acquired shares for. Furthermore, an Investor Rights Agreement will be established, granting SMBC certain rights, including the potential to appoint a board observer and a director nominee under specific ownership thresholds. The issuance is being conducted under an exemption from registration, indicating a private placement to an accredited investor.

Key Highlights

  • 1Ares Management Corporation entered into a Share Purchase Agreement with Sumitomo Mitsui Banking Corporation (SMBC).
  • 2The agreement involves the sale of approximately $383.8 million of newly issued Class A Common Stock to SMBC.
  • 3The transaction is expected to close on March 31, 2020.
  • 4A new series of non-voting common stock will be created, with an option for SMBC to exchange its shares.
  • 5An Investor Rights Agreement grants SMBC board observer and potential director nomination rights based on ownership levels.
  • 6The share issuance is being made under Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D, indicating a private placement.
  • 7Ares Management Corporation also issued Class C Common Stock to Ares Voting LLC, a non-economic class of stock related to voting power.

Frequently Asked Questions

This 8-K filing primarily announces Ares Management Corporation's entry into a material definitive agreement for a share purchase with Sumitomo Mitsui Banking Corporation (SMBC) and related corporate actions, including the creation of a new stock series.

The company expects to raise approximately $383.8 million in gross proceeds from the sale of Class A Common Stock to SMBC, before deducting offering expenses.

SMBC will have certain rights outlined in an Investor Rights Agreement. These include the potential to appoint a non-voting observer to the board if they own at least two-thirds of the shares, and the right to nominate a director if their economic ownership exceeds ten percent. They will also have transfer restrictions on their shares for a period and certain information and registration rights.

No, the shares are being issued to SMBC under an exemption from registration (Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D), indicating a private placement to an accredited investor, not a public offering.