425: Bridge Investment Group Files Supplemental Proxy Disclosures Amid Shareholder Lawsuits Challenging Apollo Merger

Bridge Investment Group Holdings Inc. has filed an 8-K to provide supplemental disclosures to its joint proxy statement/prospectus, addressing shareholder lawsuits that allege material omissions and seek to enjoin its proposed merger with Apollo Global Management.

Summary

• Bridge Investment Group Holdings Inc. (Bridge) has filed a Form 8-K to provide supplemental disclosures to its Joint Proxy Statement/Prospectus related to its proposed merger with Apollo Global Management, Inc. (Apollo).
• The merger agreement, entered into on February 23, 2025, involves Merger Sub Inc. merging into Bridge and Merger Sub LLC merging into Bridge LLC, with both surviving entities becoming wholly-owned subsidiaries of Apollo.
• The Registration Statement on Form S-4 was declared effective by the SEC on May 14, 2025, and the definitive proxy statement was mailed around May 16, 2025, for a special stockholder meeting on June 17, 2025.
• Two lawsuits, *Smith v. Bridge Investment Group Holdings Inc., et al.* and *Miller v. Bridge Investment Group Holdings Inc., et al.*, were filed on May 28, 2025, in New York County Supreme Court, alleging material omissions or misstatements in the Joint Proxy Statement/Prospectus.
• The plaintiffs in these lawsuits seek to enjoin the merger, damages, and legal fees; Bridge has also received eleven similar demands from other purported stockholders.
• Bridge denies the claims' merit and the necessity of additional disclosure but is voluntarily providing supplements to avoid merger delays and minimize litigation costs.
• Supplemental disclosures include details on J.P. Morgan's and Lazard's financial advisory processes, including the number of contacted parties and confidentiality agreements with standstill provisions.
• J.P. Morgan's discounted cash flow analysis indicated an implied value per share of Bridge Class A common stock ranging from approximately $5.93 to $9.33, based on specific unlevered free cash flow projections for FRE and PRE businesses, a 25% tax rate, 1.5%-2.5% perpetual growth rates, and 9.0%-11.0% discount rates.
• Lazard's discounted cash flow analysis indicated an implied equity value per share reference range of $8.73 to $10.93, compared to the closing price of $8.07 on February 20, 2025, and the implied merger consideration of $11.50 per share.
• Lazard disclosed receiving approximately $5.9 million in aggregate fees from Apollo, its affiliates, and controlled portfolio companies over the past two years for various investment banking services.

Sentiment

Score: 4

Explanation: The sentiment is moderately negative due to the emergence of shareholder lawsuits challenging the merger, which introduce uncertainty, potential delays, and legal costs. While Bridge is taking steps to mitigate these risks by providing supplemental disclosures, the existence of litigation inherently creates a negative overhang. The merger itself is still proceeding, and the consideration is favorable, but the legal challenges are a significant concern.

Positives

• Bridge is proactively providing supplemental disclosures to mitigate the risk of litigation delaying or adversely affecting the proposed merger, demonstrating a commitment to transaction completion.
• The implied merger consideration of $11.50 per share is higher than the implied equity value per share reference ranges derived from both J.P. Morgan's ($5.93-$9.33) and Lazard's ($8.73-$10.93) discounted cash flow analyses, suggesting a favorable valuation for Bridge shareholders in the merger.

Negatives

• Two lawsuits and eleven additional demands from purported stockholders allege that Bridge and its board violated New York State common law by omitting or misstating material information in the Joint Proxy Statement/Prospectus, potentially complicating the merger process.
• The lawsuits seek to enjoin the Transactions, which could lead to delays or even termination of the merger, and also demand damages and legal fees, posing financial and operational risks to Bridge.

Risks

• The ultimate outcome of the proposed transaction between Apollo and Bridge, including the possibility that Bridge's stockholders will not adopt the merger agreement.
• The effect of the announcement of the proposed transaction and potential business disruptions.
• Difficulties in retaining and hiring key personnel and employees post-merger.
• The ability to maintain favorable business relationships with customers and other business partners.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the merger agreement.
• The anticipated or actual tax treatment of the proposed transaction.
• The ability to satisfy closing conditions to the completion of the proposed transaction, including stockholder adoption.
• The ability of Apollo and Bridge to integrate the businesses successfully and achieve value creation from the proposed transaction.
• Global market, political, and economic conditions, including in the markets where Apollo and Bridge operate.
• The ability to secure government regulatory approvals on expected terms, at all, or in a timely manner.
• The global macro-economic environment, including headwinds from inflation, rising interest rates, unfavorable currency exchange rates, and potential recessionary or depressionary conditions.
• Cyber-attacks, information security, and data privacy breaches.
• The impact of public health crises, such as pandemics and epidemics.
• Litigation and regulatory proceedings, including any proceedings instituted against Apollo or Bridge related to the proposed transaction.
• Disruptions of Apollo's or Bridge's information technology systems.

Future Outlook

The document contains forward-looking statements regarding the proposed transaction between Apollo and Bridge, including anticipated benefits, timing, and likelihood of completion. It also covers objectives, plans, and strategies for future operations, and projections of results of operations or financial condition. These statements are subject to various risks and uncertainties, such as the ultimate outcome of the transaction, the ability to integrate businesses successfully, global market conditions, regulatory approvals, and potential litigation outcomes.

Management Comments

• Bridge believes that the claims asserted in the complaints and demands are without merit and no supplemental disclosure is required under applicable laws.
• Bridge has determined to voluntarily supplement the Joint Proxy Statement/Prospectus in order to avoid the risk of the complaints delaying or adversely affecting the Mergers and to minimize the costs, risks and uncertainties inherent in litigation, and without admitting any liability or wrongdoing.
• Bridge specifically denies all allegations in the complaints that any additional disclosure was or is required.

Industry Context

This filing pertains to a significant merger within the asset management industry, where Apollo Global Management, a major player, is acquiring Bridge Investment Group. Such transactions reflect ongoing consolidation and strategic realignments within the financial services sector, particularly among firms specializing in alternative investments and real estate, as larger entities seek to expand their asset under management and diversify their investment strategies.

Comparison to Industry Standards

• The implied merger consideration of $11.50 per share for Bridge Class A common stock exceeds the valuation ranges provided by both J.P. Morgan ($5.93 to $9.33) and Lazard ($8.73 to $10.93) in their discounted cash flow analyses, suggesting a premium paid by Apollo relative to these independent financial advisor valuations.
• The engagement of two prominent financial advisors, J.P. Morgan and Lazard, for the transaction process aligns with standard practices for significant M&A deals, ensuring robust valuation and process integrity.
• The disclosure of Lazard's prior financial advisory services to Apollo and its affiliates, including approximately $5.9 million in fees over the past two years, is a standard transparency measure in M&A transactions to inform stakeholders of potential conflicts of interest, although the document does not provide specific comparable companies or projects to benchmark these fees or services.

Corporate Governance

Legal Proceedings

• Smith v. Bridge Investment Group Holdings Inc., et al., No. 653264/2025 (filed May 28, 2025) in New York County Supreme Court.
• Miller v. Bridge Investment Group Holdings Inc., et al., No. 653290/2025 (filed May 28, 2025) in New York County Supreme Court.
• Both complaints allege that Bridge and its board of directors violated New York State common law by omitting or misstating material information in the Joint Proxy Statement/Prospectus, rendering it materially deficient.
• Plaintiffs seek to enjoin the Transactions until alleged deficiencies are corrected, damages, and attorneys' and experts' fees and costs.
• Bridge has also received eleven demands from purported Bridge stockholders making substantially similar allegations.

Related Party Transactions

• Lazard Frères & Co. LLC, a financial advisor to Bridge, has provided investment banking services to Apollo and/or certain of its affiliates or funds managed by its affiliates (Apollo-managed funds) in the past two years, for which Lazard received approximately $5.9 million in aggregate fees. These services included advising on potential investments, acquisitions, and refinancing matters for Apollo and its portfolio companies.

Stakeholder Impact

• **Shareholders**: The lawsuits introduce uncertainty and potential delays to the merger, which could impact the timing of the cash consideration. The supplemental disclosures aim to provide more information for their voting decision on June 17, 2025.
• **Management/Board**: Facing litigation and demands, requiring time and resources to address, despite denying the claims' merit. Their actions are aimed at ensuring the merger proceeds as planned.
• **Apollo Global Management**: The acquiring party, potentially impacted by delays or increased costs if the litigation prolongs or alters the merger terms.
• **Employees**: While not directly mentioned, merger delays or complications can create uncertainty regarding future employment and integration plans.

Next Steps

• Special meeting of Bridge stockholders to be held on June 17, 2025, to vote upon matters necessary to complete the Mergers.
• Apollo and Bridge will continue to integrate their respective businesses successfully and work towards achieving value creation from the proposed transaction.

Key Dates

Recommendation

Keywords

Bridge Investment Group, Apollo Global Management, Merger, Acquisition, SEC Filing, 8-K, Shareholder Lawsuit, Proxy Statement, Corporate Governance, Financial Advisory, Investment Management, Real Estate Investment, Discounted Cash Flow, Valuation, Litigation Risk