This 'story' is a plant..... Where did it come from? Answers please!
Cerberus Capital Management LP has struggled to find investment banks to help sell Freedom Group Inc., the gun company whose rifle was used in the shooting spree in Newtown, Conn., said people with knowledge of the matter.
Banks including JPMorgan Chase & Co., Credit Suisse Group AG and Barclays Plc declined to advise New York-based private-equity firm Cerberus on the sale and also won’t represent a potential buyer, said the people, who asked not to be identified because the process is private. Many of the banks were concerned about potential damage to their reputations, the people said.
Cerberus is getting help from Lazard Ltd. on the sale, several of the people said.
It’s a rarity on Wall Street for so many banks to eschew an assignment, especially one potentially worth millions of dollars in fees. Freedom Group could fetch as much as $1 billion, according to data compiled by Bloomberg.
With President Barack Obama pushing for tougher firearm-control laws and the debate polarizing the public, most banks are lying low, according to Douglas Elliott, a fellow at the Brookings Institute in Washington, which does research on U.S. public policy.
“Good investment banks will stay away from transactions where the company or management is not reputable,” said Elliott, a former investment banker. “It’s pretty rare that they will stay away because the public doesn’t like the industry.”
At least one bank willing to work with Cerberus on the sale of Freedom Group is Lazard, said several people familiar with the matter. Lazard doesn’t have a mandate or contract to sell the business yet, one of the people said.
Cerberus also tried to hire a second, larger bank as an adviser but was rebuffed, said these people. Larger banks are often needed in auction processes to help finance deals.
Cerberus may have to take a lower price or be unable to sell the business because so many banks are unwilling to
The sell off of the brands is not a big deal. While freedom may be worth $1B, the parts are worth much less, and financing should not be an issue at all. The author of this article wants the reader to come away with the concept that Freedom is pulling its hair out trying to find an advisor and that no-one will finance the deal. Oy vey. The author also frets over his mistaken theory that all the brands must be sold together, when infact, Freedom would get more in sale proceeds on a breakup basis. Look at it this way. Ruger might want Bushmaster and be willing to pay for it, but they don't want Marlin at any price. Smith might want Remingtion, but they don't want Bushmaster. Its an auction folks, and a fun one at that!