Company Press Release
PIMCO Advisors L.P., and Oppenheimer Capital L.P.
Announce Completion of PIMCO Advisors Acquisition of
One-Third Interest in Oppenheimer Capital
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Nov. 5, 1997--
PIMCO Advisors Announces Plan to Acquire Remaining Two-Thirds of
Oppenheimer Capital and to Combine Public Ownership of PIMCO
Advisors L.P. With Oppenheimer Capital, L.P.
PIMCO Advisors L.P. (NYSE:PA) and Oppenheimer Capital, L.P. (NYSE:OCC) today reported
completion of the purchase by PIMCO Advisors L.P. (''PIMCO Advisors'') of the approximately
one-third, privately held managing general partner interest in Oppenheimer Capital (the ''Operating
Partnership''), a premiere value equity investment manager.
The firms also announced today their definitive agreement for PIMCO Advisors to acquire the
remaining approximately two-thirds of the Operating Partnership now held by Oppenheimer Capital,
L.P. for 26.1 million PIMCO Advisors Class A units, equating to 1.67 PIMCO Advisors Class A
units for each Oppenheimer Capital, L.P. unit, subject only to federal antitrust approval. PIMCO
Advisors also announced their intention to cause a 1.67 to one Oppenheimer Capital, L.P. unit split
on Dec. 1, 1997, and to maintain Oppenheimer Capital, L.P. as a holding company owning one
PIMCO Advisors Class A unit for each Oppenheimer Capital, L.P. unit outstanding.
On Dec. 31, 1997, PIMCO Advisors will restructure its public ownership with each public PIMCO
Advisors unit held by the public being exchanged for one Oppenheimer Capital, L.P. unit. The
Operating Partnership will continue with the same investment personnel and process it now employs.
PIMCO Advisors and its affiliated investment management firms (including the Operating
Partnership) will have assets under management exceeding $190 billion, more than 900 employees
and nearly 50,000 unitholders. It will manage a mix of approximately 57 percent fixed-income and
43 percent equity assets, with 27 advised and subadvised funds rated four-star or five-star by
Morningstar. PIMCO Advisors and its affiliated investment management firms will manage money
for more than 50 percent of the Fortune 100 companies.
For the nine months ended Sept. 30, 1997, the group had pro forma revenues in excess of $500
million, net income of approximately $114 million and operating cash flow of more than $188 million.
In the transaction completed today, PIMCO Advisors issued 2.1 million of its Class A Units and
provided rights to holders of $230 million of 6 percent Oppenheimer Group, Inc. notes due 2037 to
exchange those notes for an additional 6.9 million PIMCO Advisors Class A units. PIMCO
Advisors also issued rights to put any of such units to PIMCO Advisors at $25.50 unless certain
termination conditions are met.
As a result of today's transaction, a wholly-owned subsidiary of PIMCO Advisors is the new
managing general partner of the Operating Partnership. PIMCO Advisors' general partner, PIMCO
Partners, G.P., is now also the general partner of Oppenheimer Capital, L.P.
In connection with the definitive agreement for PIMCO Advisors to acquire the remaining
approximately two-thirds of the Operating Partnership, and the subsequent 1.67 to 1 unit split at
Dec. 1, 1997, Oppenheimer Capital, L.P. will be renamed PIMCO Advisors Holdings L.P., which
will continue as a holding company owning one PIMCO Advisors Class A unit for each
Oppenheimer Capital, L.P. unit outstanding. PIMCO Advisors Holdings L.P. will continue to be
listed on the New York Stock Exchange.
After the restructuring of PIMCO Advisors public unitholders into units of Oppenheimer Capital,
L.P. at Dec. 31, 1997, PIMCO Advisors Holdings L.P. will own approximately 37 percent of
PIMCO Advisors and its affiliated investment management firms.
PIMCO Advisors Holdings L.P. is expected to distribute substantially all of its after-tax cash flow.
Beginning Jan. 1, 1998, it will be subject to a 3.5 percent federal tax on gross income as well as
state taxes that together are currently anticipated to raise the partnership's overall tax rate to
approximately 4.5 percent of gross income.
PIMCO Advisors announced Aug. 5th that the new taxes would have reduced cash flow available
for distribution by approximately 10-12 percent, a substantially smaller reduction than if the
partnership had become subject to corporate income tax on Jan. 1, 1998.
Oppenheimer Capital is one of the nation's leading investment management firms with more than $60
billion in assets under management. It is well-known for its value-based investment disciplines,
primarily in equity management, serving a broad range of institutional clients, including public and
private funds, jointly trusteed funds, endowments, foundations and individuals. Oppenheimer Capital
is headquartered in New York.
PIMCO Advisors is a leading investment management firm with more than $130 billion in assets
under management. Its six affiliated investment management firms are widely recognized for
providing consistent performance and high quality service for many of the nation's corporate and
public pension funds, endowments and foundations. Its affiliated mutual fund complex provides
institutional-quality investment management to individual and institutions. PIMCO Advisors is
headquartered in Newport Beach, Calif.
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............................ Bob |
