Blue Sky in discussions with Oaktree over ‘possible investment’

The Australian firm has received 'a lot of inbound approaches' regarding its private markets business since coming under attack from US short-seller Glaucus in March, says a company source.

Blue Sky Alternative Investments has confirmed it has held discussions over a “possible investment” into its business by Oaktree Capital Management, PDI sister publication Agri Investor has reported.

The asset manager reported the negotiations today in an announcement to the ASX, in response to a report in the Australian Financial Review.

In its statement, Blue Sky said: “These discussions are subject to negotiation and agreement as to investment structure and due diligence and there is no certainty they will result in a transaction.”

The firm added that its engagement with Oaktree had come in the wake of a strategic review of its business, announced on 7 May.

“Consistent with our review of business strategy and structures, we’ve had a lot of inbound approaches regarding our private market investment management business,” a company source told Agri Investor. “At this stage [there’s] nothing to discuss.”

Oaktree’s proposal would see it offer balance sheet support to Blue Sky and its underlying investments, the report said, and would be pitched as a way for the company to demonstrate it does not have a liquidity problem.

Blue Sky declined to comment on the specifics of its discussions with Oaktree or any other parties.

The firm’s share price has remained stubbornly low since it came under attack from US short-seller Glaucus in March. However, Blue Sky’s shares rose 9 percent following its announcement today, closing at A$1.84. They stood at A$11.43 before Glaucus’s move.

Market sources have speculated to Agri Investor that Blue Sky could make an attractive target for outside investors should the share price remain low.