B. Riley Co-Founder Proposes To Buyout Investment Bank For $212 Mln

(RTTNews) - Bryant Riley, co-founder and co-CEO of B. Riley Financial (RILY), has offered to buy the shares of the investment firm, which he doesn't currently own, at $7 per share, valuing the company at $212 million, according to a regulatory filing.

The offer includes 39 percent of premium to the stock's last close.

Riley wrote in a letter to the board that, "I want to make it clear that I plan on continuing to report financials to the SEC and our bonds and preferreds will continue to be publicly traded".

"It is possible that I will continue to list on a secondary exchange if there are shareholders that would like to participate in this transaction," he added.

The offer would be financed through debt, and possibly equity "from third-party capital providers with whom I have deep and long-standing relationships," Riley wrote, Bloomberg reports.

The Los Angeles-based company's special committee would review the offer. The co-founder emphasized that he would not proceed with the offer unless it is approved by the independent directors and a majority of shares he doesn't already own.

The announcement comes as the company's stock has tanked 70 percent this week, following several issues, including the bank's investment in Franchise Group (FRG), the parent company of Vitamin Shoppe, Reuters reports.

Also, the company announced, earlier this week, that it expects net loss of $435 to $475 million, or $14 to $15 per share for the second quarter.

The co-CEO explained, "Our second quarter results were negatively impacted by non-cash losses, the overwhelming majority of which relate to performance of our investment in Franchise Group, Inc. and our Vintage Capital loan receivable, which is primarily collateralized by equity interests in FRG. The substantial write-down during the quarter was driven by a confluence of recent events, including the impact of a meaningfully weaker consumer spending environment on FRG's businesses and its investments."