Sunday 03, June 2018 by Jessica Combes

Colony NorthStar to leave Abraaj Fund unit deal

 

The US asset manager walked away from a possible deal after its due diligence efforts raised concerns about the Middle East buyout firm

Colony NorthStar Inc. has ended talks to buy a majority stake in the fund-management unit of embattled Abraaj Group, which has been roiled in recent months by allegations of misused funds, according to people with knowledge of the matter, Bloomberg reported.

The US asset manager walked away from a possible deal after its due diligence efforts raised concerns about the Middle East buyout firm, the people said, asking not to be identified because the talks are private, although they added that Cerberus Capital Management LP is still in discussions about the stake and is carrying out its own due diligence. The talks with Cerberus are said to be less advanced than the ones with Colony NorthStar had been.

According to Bloomberg a spokeswoman for Abraaj said discussions for the sale of the fund-management business “are at an advanced stage,” without disclosing the identity of the potential suitors or commenting specifically about Colony NorthStar. Representatives for Colony NorthStar and Cerberus declined to comment.

Bloomberg added that it has been suggested that the collapse of the talks is a further blow for Dubai-based Abraaj as it faces growing concerns about its viability amid impending loan repayments and greater scrutiny from its local regulator; Abraaj was confident of finding a taker for its fund-management unit within weeks in a deal worth up to $600 million, citing a report by the Financial Times last month.

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