B. Riley to sell Great American Group unit to Oaktree in $386 million deal

(Reuters) -B. Riley said on Monday it has agreed to sell its appraisal and valuations unit, Great American, to asset manager Oaktree Capital in a $386 million deal that would help the investment bank pare its debt and bolster the balance sheet.

The bank will get about $203 million in cash, preferred units in a new holding company for Great American worth about $183 million, along with a minority share of common units in the holding company.

Shares of the bank jumped nearly 14% before the bell. The company had said last month it was in exclusive negotiations with a global asset manager to sell a 53% stake in its Great American Group business.

A deal could also allay investor concerns over the hit from B. Riley's exposure to Vitamin Shoppe-owner Franchise Group (NASDAQ:FRG ).

B. Riley had warned in August that its exposure to Franchise could result in a write-down and losses for the second quarter ended June 30.

The bank also postponed filing its quarterly report with regulators, the third such instance this year, due to a hold-up in finalizing the valuations of certain loans and investments.

Meanwhile, B. Riley is fielding a take-private offer from its co-founder and co-CEO Bryant Riley, who said being a public company has compelled it to focus "on short-term objectives and allocate unnecessary attention and time on constituencies who are not aligned with the owners of the business".

A stock rout has erased 79% of the bank's value so far this year.

Source: Investing.com