Pimco Will Acquire Rest of Oppenheimer Capital

Pimco Advisors, one of the nation’s largest money managers, said Wednesday that it has agreed to acquire the remaining 67% of Oppenheimer Capital that it doesn’t already own for about $850 million in stock.

Newport Beach-based Pimco would hold $190 billion in assets after the transaction, making it the nation’s fourth-largest publicly held U.S. money manager.

Pimco said it completed its initial purchase of a 33% stake in the New York asset manager on Tuesday and expects to acquire the remainder by the end of the year. Pimco will pay a total of about $1.14 billion for the entire firm.

“I think it was always expected that we’d pick up the rest of the company,” said Robert Fitzgerald, Pimco’s chief financial officer.

The pending transaction is subject to antitrust clearance from federal regulators.

The combination has been praised as an ideal fit of mostly noncompeting operations. Pimco has about 80% of its $130 billion of assets invested in bonds, while Oppenheimer Capital has about 80% of its $60 billion in assets invested in stocks.

No jobs are expected to be lost among the 900 employees in the combined operation. The two companies earned a total of $114 million on $500 million in revenue for the first nine months.

On Tuesday, Pimco acquired the 33% stake held by Oppenheimer’s general partner, Oppenheimer Group Inc., for about $65 million in stock. Pimco also assumed $230 million in debt.

On Wednesday, Pimco agreed to turn over 26.1 million partnership units for the remaining 67% stake in Oppenheimer Capital.

Those who own units in the New York firm will end up owning about 37% of the Pimco operation. But overall control will remain with original shareholders--Pimco managers and Pacific Life Insurance Co. in Newport Beach, which created Pimco.

Pimco shares rose $2.19 to close at $32.56 on the New York Stock Exchange. Oppenheimer Capital fell 88 cents to $51.31.