NEW YORK - Ares Management Corporation (NYSE:ARES), a global alternative investment manager, has announced the initiation of a public offering of 27 million shares of Series B Mandatory Convertible Preferred Stock. The offering also includes an option for underwriters to purchase an additional 3 million shares to cover over-allotments.
The net proceeds from the offering are earmarked for the payment of a portion of the cash consideration due for the acquisition of the international business of GLP Capital Partners Limited, excluding its Greater China operations, and related fees and expenses. Funds may also be used for general corporate purposes, such as debt repayment, strategic acquisitions, and growth initiatives.
Morgan Stanley and Citigroup are serving as joint bookrunning managers for the offering. The Mandatory Convertible Preferred Stock is expected to have a liquidation preference of $50 per share, with an automatic conversion into shares of Ares's Class A Common Stock on or about October 1, 2027, unless previously converted or redeemed. The terms, including the dividend rate and conversion terms, are to be determined at the time of pricing and are subject to change.
Ares reserves the right to redeem all the Mandatory Convertible Preferred Stock if the acquisition of GLP Capital Partners Limited's international business is not completed within a specified timeframe.
The offering is being made pursuant to an effective registration statement on Form S-3 filed with the Securities and Exchange Commission (SEC). Interested parties can obtain copies of the preliminary prospectus supplement and accompanying prospectus by contacting the bookrunning managers or visiting the SEC's website.
This press release, as per Ares Management, does not constitute an offer to sell or a solicitation of an offer to buy securities and is not an offer in any jurisdiction where such offer, solicitation, or sale would be unlawful. The information in this article is based on a press release statement.
In other recent news, Ares Management Corporation has announced significant acquisitions, including the international business of GLP Capital Partners Limited, excluding its Greater China operations, for $3.7 billion. Additionally, Ares has acquired Walton Street Capital Mexico, a real estate asset management company, which is expected to add approximately $2 billion in industrial real estate assets to Ares' portfolio. These acquisitions are anticipated to nearly double Ares Real Estate's assets under management to about $96 billion and expand its global reach.
Jefferies has raised its price target for Ares Management to $154, keeping a Hold rating on the stock. The firm's analyst made slight revisions to the third-quarter and full-year 2024 realized income per share estimates. TD Cowen maintained a bullish stance on Ares, reiterating a Buy rating, while CFRA raised its price target for Ares to $170. However, Redburn-Atlantic initiated coverage on Ares Management with a Neutral rating.
Ares Management's recent developments also include an 18% year-over-year increase in total assets under management, reaching $447.2 billion in the second quarter of 2024, and a 21% increase in its third-quarter common dividend. The National Football League has also approved Ares Management, among other private equity firms, to acquire up to 10% stakes in its teams. These are recent developments and reflect the ongoing activities within the company.
InvestingPro Insights
As Ares Management Corporation (NYSE:ARES) embarks on this significant public offering to fund its acquisition of GLP Capital Partners Limited's international business, it's worth examining some key financial metrics and insights from InvestingPro.
According to InvestingPro data, Ares boasts a substantial market capitalization of $50.25 billion, reflecting its prominent position in the alternative investment management sector. The company's revenue for the last twelve months as of Q2 2024 stands at $3.22 billion, although it's noteworthy that there has been a revenue decline of 11.64% over this period.
An InvestingPro Tip highlights that Ares has maintained dividend payments for 11 consecutive years, demonstrating a commitment to shareholder returns. This is particularly relevant given the company's current dividend yield of 2.32% and an impressive dividend growth of 20.78% over the last twelve months as of Q2 2024. This consistent dividend policy could be attractive to investors considering the new preferred stock offering.
Another InvestingPro Tip indicates that Ares is trading near its 52-week high, with the stock price at 99.38% of its 52-week peak. This strong performance is further evidenced by the company's robust returns, including a 52.15% price total return over the past year and a 37.77% return year-to-date as of September 2024.
It's worth noting that InvestingPro offers 13 additional tips for Ares Management, providing investors with a comprehensive analysis of the company's financial health and market position. These insights could be particularly valuable for those considering participation in the new preferred stock offering or evaluating Ares's growth strategy.
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