U.S. real estate and investment management firm Colony NorthStar Inc. ended discussions to acquire a majority stake in United Arab Emirates-based Abraaj Group Ltd.'s fund management unit after its due diligence raised concerns about the struggling buyout firm, Bloomberg reported, citing sources privy to the matter.
U.S.-based Cerberus Capital Management LP, which was earlier reported to be competing with Colony NorthStar for the stake purchase, is still in talks with Abraaj regarding a potential deal and is undertaking its own due diligence, which was at a less advanced stage than Colony NorthStar's, the report added.
The potential suitors were previously said to have been granted complete access to Abraaj's portfolio, including disclosures on claims that it misused money entrusted to it by investors in its US$1 billion healthcare fund.
Citing an Abraaj spokeswoman, the news outlet said negotiations for the sale of the company's fund management business "are at an advanced stage," but no further details were provided.
Colony NorthStar and Cerberus representatives did not offer a comment on the matter, Bloomberg added.
