B. Riley co-founder proposes buyout as investment bank faces mounting challenges

(Reuters) – B Riley is navigating one of its most turbulent years due to the ill-fated investment in Vitamin Shoppe-owner Franchise Group that has invited scrutiny from regulators and prompted investors to dump its stock.

B Riley’s co-founder and co-CEO, Bryant Riley, disclosed on Friday that he has proposed to buy the investment bank, in a dramatic end to a punishing week for its shares.

Here is a timeline of the key events surrounding the bank:

Event

Time

May 2023 B Riley backs a deal by

Franchise Group’s management

group to take the company

private. The group includes

former CEO Brian Kahn.

Aug. 2023 Take-private deal for Franchise

closes.

Nov. 2023 Bloomberg News reports Kahn was

one of the co-conspirators in a

fraud by Prophecy Asset

Management. Kahn has denied the

allegation.

Nov. 2023 B Riley reports net loss in

third quarter, compared with a

profit a year earlier, due to

unrealized investment losses in

its equities portfolio.

Nov. 2023 S&P Global downgrades Franchise

Group’s ratings, citing lower

profitability expectations.

Jan. 2024 Franchise Group appoints Andrew

Laurence as its new CEO.

Feb. 2024 B Riley says an internal review

found it had no involvement

with or knowledge of the

alleged misconduct concerning

Prophecy.

Feb. 2024 B Riley halves dividend, hires

Moelis for a strategic review

of some businesses. Delays

annual report with SEC.

April 2024 Discloses an external probe had

also cleared the bank’s

executives of any suspected

misconduct. Files annual

report.

May 2024 Delays quarterly

report with the SEC but files

it days later. Reports Q1 loss

due to unrealized investment

losses.

Aug. 2024 Suspends dividend.

Warns of losses between $14 and

$15 per share for Q2, compared

to a $1.55 per share profit

last year. Stock slumps 52%.

Bank delays quarterly report

for the third time in 2024.

Aug. 2024 Co-founder and co-CEO Bryant

Riley discloses he has proposed

to buy the investment bank for

$7 per share.

(Reporting by Niket Nishant and Manya Saini in Bengaluru; Editing by Maju Samuel)