Last week two companies I own decided to merge, creating a new alternative assets behemoth. Brookfield will buy out OAK shareholders for $49 or 1.0770 shares (equivalent to $49/1.0770 = $45.50 per BAM share).
My stake in OAK was 75% larger than my stake in BAM. So superficially any acquisition should make me happy. However, I am somewhat disappointed as an OAK shareholder (estimate IV ~ $55), and think BAM got the better deal here.
The deal is almost certain to close by 3Q 2019. According to the normal calendar OAK is due for a ~$1/share distribution in May. I haven’t decided whether to take BAM shares or cash (perhaps by selling before the close). My last BAM buy was in December 2018 around $37.50/share, so I am not overjoyed about having to pay a price near the TTM high. However, if the conversion is tax-free then then it would probably make sense to take the swap, since my cost basis in OAK is near $40.
Update: A nice initial take on the acquisition