West Palm Beach (HedgeCo.Net) – Cerberus Capital made headlines last year when they announced that they would unload their ownership of Freedom Group Inc, the company that manufactured the Bushmaster rifle after it was used in the Sandy Hook shooting.
The move was seen at the time as a symbolic gesture to satisfy the requests of the state pension funds which were pressuring the fund. The sale was announced with the goals to “sell our interests in Freedom Group, and we will then return that capital to our investors”. In a statement Cerberus Capital stated that this decision “allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so.”
Selling the massive portfolio proved to be a challenge and the sale was put off due to banks reluctance to run the auction in the likelihood of upcoming regulation on assault weapons. With the failure of the gun regulation bill in senate Cerberus is back to the negotiating table.
Stephen Feinberg, owner of Cerberus Capital, has started negotiations by announcing that he will put together a consortium to place a bid for the purchase the Freedom Group from Cerberus Capital Management. There are reports of over 25 other parties interested in purchasing freedom group, New York Times is reporting that these buyers include American company Smith & Wesson and the Brazilian gun maker Taurus.
Wall Street Journal reports that the group lead by Mr. Feinberg would withdraw from the bidding if a another group tops its offer by 10%