Diamond Hill Investment Group Issues Supplemental Disclosures Amid Shareholder Litigation Over Merger

Key Developments in Ongoing Special Meeting and Merger with First Eagle

Diamond Hill Investment Group, Inc. (NASDAQ: DHIL) has issued a significant Form 8-K filing on February 24, 2026, providing new and supplemental disclosures in connection with its proposed merger with First Eagle. This filing comes amid ongoing shareholder litigation and demand letters challenging the adequacy of previous disclosures, and may have material implications for the company’s share price and investor considerations.

Key Points from the 8-K Report

• Shareholder Lawsuits and Demand Letters: Multiple purported shareholders, through their attorneys, have sent demand letters to Diamond Hill, alleging deficiencies in the company’s Proxy Statement regarding the proposed merger. These letters threaten litigation if the alleged disclosure issues are not addressed. The company reports that additional similar complaints or demand letters may be filed, but it does not intend to announce each one unless legally required.
• Company Response: Diamond Hill believes the claims in the lawsuits and demand letters are without merit. However, to mitigate potential litigation risks and costs, as well as to provide further information to shareholders, the company has voluntarily supplemented its Proxy Statement. The company explicitly denies that additional disclosure was required but is making these supplemental disclosures nonetheless.
• Supplemental Disclosures to the Proxy Statement: The new disclosures amend and update several sections of the Proxy Statement related to the background of the merger, financial analyses, and interests of directors and executive officers.

Details of the Supplemental Disclosures

1. Financial Projections:
   • Diamond Hill’s senior management reviewed updated financial projections that included the full third fiscal quarter of 2025. These projections, which were authorized for sharing with First Eagle, did not materially differ from earlier versions sent in September 2025.
2. Comparable Public Companies Analysis:
   • The financial advisor’s analysis was expanded to show a detailed table of comparable companies and their respective Enterprise Value/EBITDA multiples for 2025E, 2026E, and 2027E. Companies include Acadian Asset Management (9.9x/7.7x/7.0x), Affiliated Managers Group (7.8x/6.5x/6.3x), BlackRock, Inc. (11.2x/10.3x/9.6x), among others.
3. Adjustments to Enterprise Value:
   • Broadhaven, the financial advisor, adjusted Diamond Hill’s implied enterprise value by the value of excess balance sheet assets, calculated as approximately \$43 million in cash, \$134 million in net investments, \$31 million in net working capital (relative to three months of annual operating expenses), and \$15 million in declared but unpaid dividends as of September 30, 2025. The term “balance sheet” was replaced with “financial statements” for clarity.
4. Precedent Transaction Analysis:
   • Updated precedent transaction multiples were disclosed, including Perpetual Limited at 8.0x and Legg Mason, Inc. (acquired by Franklin Resources) at 10.4x EV/EBITDA.
5. Discounted Cash Flow Analysis:
   • Broadhaven’s DCF analysis again adjusted for excess balance sheet assets with the same values as above, and clarified the use of “financial statements” as of September 30, 2025.
6. Interests of Directors and Executive Officers:
   • Additional information was provided regarding the interests of directors and executive officers in the merger, supplementing prior Proxy Statement disclosures.

Forward-Looking Statements and Risks

• The company reiterates that forward-looking statements in the filing are subject to significant risks and uncertainties, including potential impacts on assets under management, client relationships, regulatory approvals, transaction costs, and the possibility that the merger may not be completed.
• Investors are cautioned that actual results may differ materially from expectations due to these factors.

Material and Price-Sensitive Considerations for Shareholders

• Litigation and Demand Letters: The existence of shareholder litigation and demand letters regarding the sufficiency of merger-related disclosures could impact the timing, outcome, or even completion of the merger. This ongoing legal activity is a material risk for shareholders.
• Supplemental Disclosures: While the company maintains that no additional disclosures were legally required, the voluntary release of more detailed financial and transaction data may influence how shareholders evaluate the merger and could affect voting decisions and share value.
• Merger Status: The merger with First Eagle is subject to shareholder approval and regulatory conditions. Any developments related to the lawsuit outcomes, regulatory reviews, or changes in deal terms could be price-sensitive.

Additional Information for Investors

• The company urges shareholders to read all relevant documents filed with the SEC, including the definitive Proxy Statement filed January 28, 2026, before making any voting decisions. Free copies are available at www.sec.gov and on the company’s website www.diamond-hill.com.
• Directors, executive officers, and related persons may be deemed participants in the proxy solicitation for the merger. More information can be found in the company’s proxy statement and SEC filings.

Disclaimer: This article summarizes and interprets the content of Diamond Hill Investment Group’s Form 8-K filed on February 24, 2026. It is intended for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should review all official SEC filings and consult their own advisors prior to making investment decisions. The company’s statements regarding the merger and related litigation involve forward-looking statements that are subject to risks and uncertainties, and actual outcomes may differ from those anticipated.

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