Bridge Investment Group Merger with Apollo: A Critical Evaluation of Shareholder Value Erosion

The proposed merger between Bridge Investment Group (BRDG) and Apollo Global Management (APO) has drawn scrutiny from investor rights firm Kahn Swick & Foti (KSF), which has launched an investigation into the fairness of the transaction. With BRDG shareholders set to vote on the deal on June 17, 2025, the 0.07081 APO shares-per-BRDG-share exchange ratio has sparked concerns that the terms undervalue Bridge’s standalone prospects, industry comparables, and Apollo’s volatile stock performance. This analysis argues that shareholders should demand better terms or explore alternatives to avoid irreversible value destruction.

The Implied Valuation: A Discounted Future?

The merger values Bridge at $1.5 billion in equity, based on an exchange ratio of 0.07081 APO shares per BRDG share, which equates to $11.50 per BRDG share. This price, however, appears to discount Bridge’s strategic assets and operational strengths.

First, consider Bridge’s standalone potential. As of March 2025, the company managed $50 billion in assets under management (AUM), specializing in residential and industrial real estate—a sector experiencing sustained demand. Despite a Q1 2025 net loss of $37.6 million, Bridge reported $24.6 million in fee-related earnings, a metric Apollo highlighted as “immediately accretive” to its own results. If Bridge’s fee-generating capabilities are strong enough to boost Apollo’s earnings, why is its equity being priced at a 30% discount to its peak stock price of $16.50 in early 2024?

Second, the reliance on Apollo’s stock as currency raises red flags. At the time of the merger announcement, Apollo’s stock was valued at approximately $162.43 per share (calculated via $11.50 / 0.07081). Yet Apollo’s own stock performance has been volatile, with its price falling by 15% in the 12 months prior to the merger announcement. If Apollo’s shares underperform post-merger—due to integration challenges or regulatory delays—BRDG shareholders could face further dilution.

Industry Comparables: Is the Deal Fair?

To assess fairness, compare the merger terms to recent real estate investment trust (REIT) and asset management deals. For example:
- In 2023, Blackstone (BX) acquired a REIT platform at a 20% premium to its 90-day average stock price.
- In 2024, KKR’s (KKR) acquisition of a private equity real estate firm included cash considerations alongside stock to mitigate volatility risk.

By contrast, the BRDG-APO deal offers no cash component, relying entirely on Apollo’s stock. This structure shifts risk entirely to BRDG shareholders, who must bet on Apollo’s stock price stability—a gamble that recent performance suggests is perilous.

KSF’s Role and Legal Risks: A Wake-Up Call for Shareholders

Kahn Swick & Foti’s investigation underscores critical governance flaws. The merger was negotiated by Bridge’s management, which holds ~51.4% of voting power and has already pledged to vote in favor of the deal. This raises questions about whether an independent Special Committee conducted a robust search for alternatives or leveraged Apollo’s stock volatility to secure favorable terms.

Should shareholders reject the deal, Bridge’s board faces legal exposure. If courts determine the process was unfair—for instance, if management failed to secure maximum value—Apollo could be liable for damages, and Bridge’s leadership could face shareholder lawsuits.

Strategic Implications: Act Now or Regret Later

BRDG shareholders face a stark choice:
1. Approve the Deal: Accept a potentially undervalued stock swap and cede control to Apollo, risking further dilution if Apollo’s stock falters.
2. Demand Alternatives: Pressure Bridge’s board to seek a higher cash component, explore a sale to a rival bidder, or pursue a standalone strategy leveraging its $50 billion AUM.

The clock is ticking. With the shareholder vote looming on June 17, investors must act swiftly. KSF’s investigation provides a critical tool: shareholders can file a class-action lawsuit if the deal proceeds under unfair terms, or engage with the firm to negotiate better protections.

Final Call to Action: Protect Your Stake

The BRDG-APO merger is not just a financial transaction—it’s a litmus test for corporate governance. By approving this deal at its current terms, shareholders risk perpetuating a pattern of value erosion in the asset management sector. Demand transparency, push for an independent fairness opinion, and consider legal recourse if the terms remain unchanged. Your capital deserves better.

Investors: Vote with your conscience—and your lawyers. The clock is ticking.