Ares management records loss after announcing new share offer and share purchase agreement

ARES shares slipped 6.66% or $ 3.94 per share after the company said it would issue 9.5 million Class A common shares in a subscribed public offering. The company’s shares were trading lower Tuesday afternoon at $ 55.11.

What caused the ARES stock to drop?

Investors responded to the offer of ARES common stock by divesting themselves, thereby depressing the share price. Ares Management Corp. plans to offer 9.5 million of its Class A common shares, at a par value of $ 0.01 per share, and plans to allow the underwriters of the offer to purchase up to 1,425,000 common shares of additional category A.

What does this mean for Ares Management Corp?

In addition to the offering, ARES announced that it has secured a $ 250 million share purchase commitment from Sumitomo Mitsui Banking Corp. Sumitomo, a current shareholder of Ares, will purchase the shares at a price per share equal to the public offering price.

Ares said in a statement that the proceeds from the Sumitomo purchase and the private placement would be used to repay the acquisition of Landmark Partner LLC and its subsidiaries, as well as for general corporate purposes.

ARES has a Long Term Tech Rank of 77. Find out what that means to you and get the rest of the rank on ARES!

Ares Management Corp is a United States-based asset management company. It provides investors with investment advice and capital growth strategies. The company’s operating segments include Credit Group, Private Equity Group, Real Estate Group and Strategic Initiatives. Its credit group generates maximum revenue, manages credit strategies across the entire liquid and illiquid spectrum, including syndicated loans, high yield bonds, multi-asset credit, alternative credit investments and direct loans. Private Equity Group manages investment strategies categorized into corporate private equity, infrastructure and power, special opportunities and energy opportunities, while Real Estate Group is engaged in the management of real estate and debt investment strategies.

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