Bryant Riley, the co-founder and co-CEO of B. Riley Financial (RILY), has proposed to acquire the shares of the investment firm that he does not currently own at a price of $7 per share. This offer values the company at $212 million, according to a regulatory filing.
This offer represents a 39 percent premium over the stock's most recent closing price.
In a letter to the board, Riley clarified, "I want to make it clear that I plan on continuing to report financials to the SEC and that our bonds and preferred shares will continue to be publicly traded."
He also mentioned, "It is possible that I will continue to list on a secondary exchange if there are shareholders who wish to participate in this transaction."
The proposal would be financed through debt and potentially equity from third-party capital providers with whom Riley has longstanding relationships, Bloomberg reports.
A special committee of the Los Angeles-based company will review the offer. Riley emphasized that he will not proceed unless the offer is approved by the independent directors and a majority of the shares he does not already own.
This announcement follows a 70 percent drop in the company's stock this week, attributed to several issues, including the bank's investment in Franchise Group (FRG), the parent company of Vitamin Shoppe, Reuters reports.
Additionally, the company announced earlier this week that it expects a net loss of $435 to $475 million, or $14 to $15 per share, for the second quarter.
The co-CEO explained, "Our second quarter results were negatively impacted by non-cash losses, the overwhelming majority of which are related to the performance of our investment in Franchise Group, Inc. and our Vintage Capital loan receivable, which is primarily collateralized by equity interests in FRG. The substantial write-down during the quarter was driven by a confluence of recent events, including the impact of a significantly weaker consumer spending environment on FRG's businesses and its investments."
