Cerberus returns with knockdown bid for Abraaj – exclusive

The distressed specialist reduced its offer to around $20m for Abraaj's entire platform on Monday.

Cerberus Capital Management has made a bid for Abraaj Group‘s fund business that is as much as six times smaller than its initial June bid, Private Equity International has learned.

The New York-headquartered distressed specialist launched an offer on Monday of around $20 million, according to a source familiar with the matter. Cerberus had bid around $125 million for Abraaj’s private equity business in June.

The latest bid is for the rights to manage Abraaj’s entire platform, the source noted. This includes 35 separate funds.

Real estate specialist Colony Capital announced in June it had agreed to acquire management of Abraaj’s Latin America, sub-Saharan Africa, North Africa and Turkey funds business and the firm’s limited partnership interests in the underlying vehicles. The Los Angeles-headquartered firm also said it would transfer staff from the eight offices affected by the deal.

That deal had received regulatory approval in principle and was expected to receive final approval by 1 July, according to a 21 June statement from Abraaj.

Colony has since retreated from that offer, the source noted, while Cerberus is waiting to hear whether Abraaj accepts its latest bid.

Bloomberg reported on Tuesday that Cerberus and Colony had made fresh bids for Abraaj’s funds.

The embattled emerging markets private equity firm was thrust into the spotlight in February after four limited partners in its 2013-vintage Global Healthcare fund hired an auditor to examine the alleged misuse of funds from the vehicle. The firm has since undergone a series of setbacks including an exodus of senior staff, a cancelled fundraise and further allegations of misuse of fund capital. Abraaj has denied any wrongdoing.

In mid-June Abraaj was given breathing space when a Cayman Islands court approved its application for provisional liquidation, allowing the firm to negotiate an orderly restructuring process.

Cerberus and Colony declined to comment. Abraaj was not able to respond to a request for comment by press time.

– Isobel Markham contributed to this report.