Ares Management Buying Kayne Anderson for $2.55B

Ares Management L.P., a leading global alternative asset manager, announced this week that it has agreed to buy Kayne Anderson Capital Advisors L.P. for $2.55 billion, creating one of the nation's largest and most diversified alternative asset managers with a combined $113 billion of assets under management. The two firms, which are headquartered one block from each other in Los Angeles, will operate as Ares Kayne Management, L.P. with Kayne Anderson Chairman and Founder Richard Kayne and Ares Management Chairman and CEO Ressler serving together as Co-Chairmen. The transaction is expected to close on or around January 1, 2016, subject to customary regulatory approvals, investor consents and other closing conditions.

"We have long known and admired Kayne Anderson as an industry leader in energy, energy infrastructure, real estate and other asset classes, and this merger will make us a differentiated investment manager with five market-leading businesses. We expect the combination will make us better investors by greatly enhancing our expertise in these compelling sectors and will create new opportunities as we leverage each other's complementary investor bases to expand our distribution," said Tony Ressler, Ares Chairman and CEO in a press release. "In addition, Kayne Anderson adds long-lived capital and significantly increases our fee-related earnings, which we expect will make this merger meaningfully accretive to Ares' unit holders."

Ares will pay $2.55 billion to Kayne Anderson's owners, consisting of $500 million to $750 million in cash and 94.7 million to 107.9 million partnership stock units, according to a regulatory filing Friday. According to a Bloomberg Business report, employees of Ares will own about half of the new company and Kayne Anderson employees approximately 30%, Tony Ressler said on a conference call Friday. As a condition of the merger, Kayne Anderson employees will be restricted from transferring equity from the transaction until May 2016 and will be subject to a lockup on sales through 2021, reported GlobeSt. Ares employee unit holders will be subject to similar restrictions.

For more news and information visit Blumberg Partners.

China Greenland Investing $2B in London Skyline

Greenland Holding Group Co., a major Chinese state-owned real-estate developer, announced plans this week to invest £1.2 billion ($2 billion) in two real estate projects in London, marking its entry into the U.K. market. Greenland signed an agreement to buy developer Minerva's Ram Brewery, a historic seven acre site in Wandsworth claimed to be the UK's oldest working brewery until it closed in 2006, according to a City A.M. article. Minerva was acquired by clients of Ares Management and Delancey in 2011, who sold the property this month to Greenland for £600m. The brewery site has outline planning consent for 661 new homes, including a 36-story tower providing 166 units and 9,500 square metres of space for new shops and restaurants.

Paul Goswell, managing director of Delancey, said: "Since acquiring Minerva two years ago, we have worked hard to comprehensively redesign the original scheme which culminated in planning consent being secured last December. Our strategy had been to implement the scheme ourselves, possibly with a partner, but that changed when Greenland made their unsolicited proposal."

Greenland president and chairman Zhang Yuliang, who flew to London for the signing of the Ram Brewery deal, said: "London is the global financial centre as well as the most open and diversified city that enjoys the most mature economic development, making it the first option for our investment in Europe. Due to the active trading in London local real estate market in the last two years, the average residential price rose by 10% in 2013, and the increase in demand is expected to continue in 2014. There have been more and more individual investors who favor the UK market, thanks to the stable return on assets, high quality assets and sound market liquidity."

Guy Grainger, UK CEO of Jones Lang LaSalle, which aligned Minerva with Greenland, described the project as a landmark transaction for the London residential market. "This deal emphasizes the strong relationships currently being created between the UK and China, and further highlights London as the No 1 destination for international capital," he added.

Greenland will also build apartments on a 3,700-square-meter site in the city's financial district of Canary Wharf. Greenland said it plans to build London's tallest luxury residential housing project at the site. More details on that project will be announced at the end of the month, the company said.

For more news and information visit Blumberg Capital Partners.

99 Cents Only Stores Reach Agreement to Sell for $1.6B

A new article from CoStar reports that 99 Cents Only Stores agreed to be acquired by affiliates of Ares Management LLC and Canada Pension Plan Investment Board for $20/share of common stock for a total value of $1.6 billion. The chain, founded in 1982, has 289 stores in the United States, most of which are located in California where 99 Cents Only is headquartered. As part of the deal, CEO Eric Schiffer, Chief Operating Officer Jeff Gold and Executive Vice President Howard Gold would stay in their current leadership roles and will serve as directors while founder David Gold would be chairman emeritus.

"We expect this transition to be a win-win for everyone as it delivers significant value to our shareholders," Schiffer told employees when announcing the deal. "It provides access to expertise to help us accelerate our growth, and helps ensure that we can continue to deliver extreme value to our customers and provide a great place to work for our 99ers. The news of this agreement should not be a distraction to any of us, as we do not contemplate any material change in the way the business is managed. It is business as usual."

99 Cents Only Stores is required to pay a termination fee of $47.25 million if it terminates the merger agreement under certain circumstances. Ares and the Canada Pension Plan would have to pay a $94.5 million termination fee. Since the announcement of the agreement, Weiss & Lurie, a national class action and shareholder rights law firm, has filed a class action on behalf of the shareholders of 99 Cents Only Stores in connection with the proposed acquisition alleging that it provides unfair and inadequate consideration to public NDN shareholders.

For more news and information visit Blumberg Capital Partners.