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(Reuters) -B. Riley Financial's co-founder and co-CEO Bryant Riley said on Monday he has dropped plans to take the investment bank private, as it is no longer the best course of action given the company was showing signs of recovery.
"There remains substantial potential in our business, and with the steps we've taken to improve our balance sheet, I believe shareholders should have an opportunity to participate in this recovery," Riley said on a call with investors.
Riley, the bank's largest shareholder, proposed an offer last year of $7 for each of the remaining shares he did not own at the time, in a deal that valued the bank at $212 million.
The non-binding, take-private offer had come amid turmoil arising from the bank's association with Vitamin Shoppe-owner Franchise Group, which drew attention from both investors and regulators.
Riley added that the company's debt structure would have also complicated the process of taking it private. The investment bank will focus on growing its broker-dealer and wealth management business, while working towards improving its balance sheet.
It finalized the sale of a majority stake in its liquidation business, Great American, to investment firm Oaktree during the fourth quarter.
"While we recognize we have work to do, we do believe the worst is behind us," said Riley.
Shares of the bank rose about 4% in extended trading as it also announced preliminary quarterly results.
B. Riley said it plans to report net income in the range of $48 million to $68 million, which includes about $236 million to $247 million of income from discontinued operations.
It reported total debt, net of cash and investments of $991 million as of December 31, a $221 million decline from the third quarter.
The company's annual report is due on March 17.
(Reporting by Arasu Kannagi Basil, Manya Saini and Bhanvi Satija in Bengaluru; Editing by Mohammed Safi Shamsi and Alan Barona)