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Cerberus steps up sale of Sandy Hook gunmaker Bushmaster

2 Apr 2013

bushmaster_ar15-m4Distressed asset investor Cerberus is reportedly ramping up the sale process for gunmaker Freedom Group, the maker of the Bushmaster assault rifle used to kill 20 children and six staff at Sandy Hook Elementary School.

Cerberus revealed it planned to exit its stake in Freedom four days after the massacre in December last year, but the sale got off to a slow start according to the FT, which cited people familiar with the matter.

It said several interested parties had been given access to Freedom’s financial information, adding that Cerberus expected bidding to escalate this week through a more formal auction.

Potential investors are thought to include fellow buyout houses looking to pick up underpriced assets, with a deal expected to raise up to $1bn.

Cerberus created Freedom Group after buying gun manufacturer Bushmaster in 2006.

Its decision to sell came as CalSTRS, the country’s second largest pension fund with $155bn under management, said it was reviewing its investment with Cerberus in the wake of the shootings.

CalSTRS had invested $751.4m with Cerberus by the end of March 2012, according to its website.

The Sandy Hook killings were described by Cerberus as “a watershed event that has raised the national debate on gun control to an unprecedented level”.

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