trending Market Intelligence /marketintelligence/en/news-insights/trending/x5bv8dfbxdpter6sip2rdg2 content esgSubNav
In This List

Report: Cerberus, Colony NorthStar in race to acquire Abraaj's buyout unit

Blog

Using ESG Analysis to Support a Sustainable Future

Podcast

Street Talk Episode 87

Blog

A New Dawn for European Bank M&A Top 5 Trends

Blog

Insight Weekly: US banks' loan growth; record share buybacks; utility M&A outlook


Report: Cerberus, Colony NorthStar in race to acquire Abraaj's buyout unit

Abraaj Group Ltd. is in advanced discussions with U.S.-based Cerberus Capital Management LP and Colony NorthStar Inc. for the sale of its private equity business in a potential deal that could be valued at up to $600 million, people briefed on the matter told the Financial Times.

Abraaj is confident an agreement will be made in the coming weeks, the sources said, adding that the proposed deal price will help the United Arab Emirates-based group pay off its creditors, including Mashreqbank PSC.

The group confirmed "at least three companies" have completed due diligence on the business over the past six weeks, including matters that have been "conjectured upon in the press," the FT added.

Cerberus and Colony NorthStar, which are currently carrying out due diligence, were given full access to the group's portfolio, including disclosures on claims that it misused money entrusted to it by investors in in its $1 billion healthcare fund, as well as another case of mishandling money in a separate fund, the report noted.

Since the allegations by the healthcare fund investors emerged in February, Abraaj has released commitments made by investors to its now-shelved $6 billion private equity fund and laid off staff.

The sources said four of the healthcare fund investors, including the Bill & Melinda Gates Foundation, have accepted the group's resignation from the healthcare fund and agreed to name an interim manager to settle the original argument. A source close to the investors told the FT that discussions were ongoing but an agreement is yet to be reached.

Abraaj is also hoping to complete the delayed sale of its stake in Pakistani power utility K-Electric Ltd to China-based Shanghai Electric Power Co. Ltd., the sources added. The deal could return up to $1.8 billion to investors, including $500 million to parent Abraaj Holding, the report noted.

Colony NorthStar was formed in January 2017 from the merger of Colony Capital Inc., NorthStar Asset Management Group Inc. and NorthStar Realty Finance Corp.