DEFA14A: DigitalBridge to Go Private in $16/Share SoftBank-Backed Merger

DigitalBridge Group, Inc. has entered into a definitive merger agreement to be acquired by Duncan Holdco LLC, an affiliate of SoftBank Group Corp., for $16.00 per share in cash.

Summary

• DigitalBridge Group, Inc. (the Company) entered into an Agreement and Plan of Merger with Duncan Holdco LLC (Parent), an affiliate of SoftBank Group Corp., on December 29, 2025.
• The Company will merge with Merger Sub I, and DigitalBridge Operating Company, LLC (Company OP) will merge with Merger Sub II, with the Company and Company OP continuing as the surviving entities.
• Each share of Class A, Class B, and Performance Common Stock of the Company, issued and outstanding immediately prior to the Company Merger Effective Time, will be converted into the right to receive $16.00 in cash, without interest and subject to withholding.
• Each Company OP Common Unit, issued and outstanding immediately prior to the LLC Merger Effective Time (other than those held by the Company or Company OP), will also be converted into the right to receive $16.00 in cash, without interest and subject to withholding.
• Company preferred stock and Company OP preferred units will remain outstanding as preferred stock/units of the Surviving Corporation and Surviving Company OP, respectively.
• The Company's board of directors, acting on the unanimous recommendation of a committee of independent and disinterested directors, unanimously approved the mergers and resolved to recommend stockholder approval.
• An affiliate of SoftBank Group Corp. has provided an equity financing commitment to Parent for the transactions.
• The consummation of the mergers is subject to several closing conditions, including approval by the Company's stockholders, expiration or termination of waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and receipt of certain non-U.S. antitrust approvals.
• Additional regulatory approvals are required from the Committee on Foreign Investment in the United States (CFIUS), Federal Energy Regulatory Commission (FERC), Federal Communications Commission (FCC), Monetary Authority of Singapore, UK Financial Conduct Authority, and the European Union under the EU Foreign Subsidies Regulation 2022/2560.
• Required consents for the Company's flagship investment funds and from fee-paying clients representing, in aggregate, at least 85% of the base date revenue run rate of the fee-paying clients, are also conditions for closing.
• The Company is subject to customary 'no-shop' restrictions but may engage in discussions and negotiations regarding unsolicited bona fide written acquisition proposals that could lead to a 'superior proposal,' with Parent retaining matching rights.
• A Company Termination Fee of $96,000,000 is payable by the Company in certain limited circumstances, such as terminating for a superior proposal or a change in board recommendation.
• A Parent Termination Fee of $154,000,000 is payable by Parent in certain limited circumstances, including if the merger is terminated due to legal restraints prohibiting the mergers or if regulatory approvals are not satisfied by the Outside Date.

Sentiment

Score: 8

Explanation: The filing announces a definitive merger agreement at a fixed cash price, which typically provides certainty and a premium for shareholders. The unanimous board approval and strong financial backing from SoftBank are positive indicators. However, the extensive regulatory conditions and potential for delays or termination fees introduce some moderate risks, preventing a perfect score.

Positives

• Common stockholders and Company OP Common Unit holders will receive a fixed cash consideration of $16.00 per share/unit, providing certainty and liquidity.
• The merger was unanimously approved by the Company's board of directors, based on the recommendation of an independent committee, suggesting favorable terms for shareholders.
• An affiliate of SoftBank Group Corp. has provided an equity financing commitment, indicating strong financial backing for the transaction.
• Company preferred stock and Company OP preferred units will remain outstanding, preserving their existing rights and preferences.

Negatives

• The Company will be required to pay a termination fee of $96,000,000 in certain circumstances, such as if it terminates the agreement to pursue a superior proposal or if the board changes its recommendation.
• The 'no-shop' restrictions limit the Company's ability to actively solicit alternative acquisition proposals, potentially restricting opportunities for higher offers.
• The transaction is subject to numerous and complex regulatory approvals, including international antitrust and foreign investment reviews (CFIUS, EU Foreign Subsidies Regulation), which could introduce delays or burdensome conditions.
• A significant closing condition requires obtaining consents from fee-paying clients representing at least 85% of the base date revenue run rate, which could be challenging to achieve.

Risks

• Uncertainties exist regarding the timing of the Mergers.
• There is a risk that the Mergers may not be completed on the anticipated terms or at all.
• Failure to satisfy any of the conditions to the consummation of the Mergers, including receiving required approvals from the Company's stockholders and various governmental entities (e.g., HSR, CFIUS, FCC, FERC, Monetary Authority of Singapore, UK Financial Conduct Authority, EU Foreign Subsidies Regulation).
• The possibility that competing offers or acquisition proposals for the Company will be made.
• The occurrence of any event, change, or other circumstance that could give rise to the termination of the Merger Agreement, including situations that would require the Company to pay a termination fee.
• The announcement or pendency of the transactions could affect the Company's ability to retain and hire key personnel, maintain relationships with customers and suppliers, or impact its operating results and business generally.
• Risks related to diverting management's attention from the Company's ongoing business operations.
• Stockholder litigation in connection with the transactions may result in significant costs of defense, indemnification, and liability.
• Certain restrictions during the pendency of the Mergers may impact the Company's ability to pursue specific business opportunities or strategic transactions.
• There is a risk that the benefits of the Mergers are not realized when and as expected.
• The Company's or SoftBank's business could be adversely impacted during the pendency of the acquisition.
• Legislative, regulatory, and economic developments could affect the transaction.
• Other risk factors identified in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, and other SEC filings.

Future Outlook

The Company and Parent intend to consummate the mergers as soon as practicable, subject to obtaining stockholder approval, various regulatory clearances (including HSR, CFIUS, FCC, FERC, and non-U.S. antitrust approvals), and consents from a significant portion of fee-paying clients. The parties are committed to using reasonable best efforts to satisfy these conditions, with an Outside Date for completion set for March 29, 2027, which may be extended.

Management Comments

• The board of directors of the Company, acting on the unanimous recommendation of a committee of the Board consisting solely of independent and disinterested directors, has unanimously approved and determined advisable the Mergers contemplated by the Merger Agreement and resolved to recommend that the stockholders of the Company vote in favor of approval of the Company Merger.

Industry Context

This acquisition reflects the ongoing consolidation and strategic investments within the digital infrastructure and asset management sectors. SoftBank's involvement underscores a continued interest in high-growth digital assets, aligning with broader trends of institutional capital flowing into essential infrastructure. The extensive regulatory review process, including CFIUS and EU Foreign Subsidies Regulation, highlights the increasing scrutiny of cross-border transactions involving critical infrastructure and technology assets.

Management Changes

Corporate Governance

Legal Proceedings

• The filing mentions risks related to 'stockholder litigation in connection with the transactions contemplated by the Merger Agreement' and 'significant costs of defense, indemnification and liability' that may result from such litigation.

Related Party Transactions

• The filing explicitly states that there are no undisclosed contracts or arrangements between Parent/Merger Subs/Affiliates and Company management/Board/beneficial owners that relate to the Company, its businesses, or the transactions, or that would entitle them to different consideration or influence voting, or provide equity investment to finance the mergers.

Stakeholder Impact

• Shareholders (Common Stock): Will receive $16.00 per share in cash, providing immediate liquidity and a fixed return on their investment.
• Shareholders (Preferred Stock): Preferred stock will remain outstanding with existing terms, preserving their investment and associated rights.
• Company OP Common Unit Holders: Will receive $16.00 per unit in cash, providing immediate liquidity and a fixed return.
• Employees: Parent will provide base salary/hourly wage and annual incentive compensation opportunities no less favorable for one year post-merger. Severance benefits will be no less favorable, and other employee benefits will be substantially comparable in aggregate. Service with the Company will be recognized for new benefit plans.
• Customers/Clients: The transaction requires consents from fee-paying clients representing at least 85% of the base date revenue run rate, indicating potential impact on client relationships and the need for continuity of service.
• Management: Management's attention may be diverted from ongoing business operations during the pendency of the mergers. New directors and officers will be appointed post-merger, aligning leadership with the acquirer's structure.

Next Steps

• The Company will prepare and file a proxy statement with the SEC for the Company Stockholders Meeting.
• The Company will duly call, give notice of, convene, and hold a meeting of its stockholders to obtain the Company Required Stockholders Vote.
• The Company and Parent will file necessary applications and notifications to obtain various regulatory approvals, including under the HSR Act, from CFIUS, FCC, FERC, and non-U.S. antitrust authorities.
• The Company will use reasonable best efforts to obtain consents from fee-paying clients representing at least 85% of the base date revenue run rate.
• Parent may conduct one or more consent solicitations to obtain amendments to the terms of the Company's preferred stock.
• Following the Company Merger Effective Time, Parent will use reasonable best efforts to cause the Company Common Stock and Company Preferred Stock to be delisted from the New York Stock Exchange and de-registered under the Exchange Act.

Key Dates

Recommendation

The definitive merger agreement offers a fixed cash price of $16.00 per share for common stockholders and common unit holders, representing a clear and certain return. The unanimous approval by the independent committee and the full board, coupled with the equity financing commitment from SoftBank, suggests a high probability of successful completion. Investors can consider buying shares if the current market price is below $16.00, anticipating the arbitrage opportunity as the stock converges to the offer price, assuming regulatory and client consent conditions are met without significant issues. The downside risk is limited to the current trading price if the deal falls through, while the upside is the $16.00 cash consideration.

Keywords

Merger, Acquisition, DigitalBridge Group, SoftBank Group Corp., Cash Offer, SEC Filing, Corporate Governance, Regulatory Approval, CFIUS, Shareholder Vote, Private Equity, Asset Management, Infrastructure