Three heads good

6 April 2006 By Antony Currie Follow @AntonyMCurrie

Up to 50 coinvestors are clamouring for a nibble of the biggest equity investment ever by a leveraged buyout firm. That s because the recordbreaking deal for a stake in the General Motors finance unit is so sweet. Cerberus is paying less than book value.

This content is for Subscribers only

Context News

Cerberus Capital Management has already syndicated around $5.4bn of the record $7.4bn in equity it is paying for a 51% stake in GMAC, according to a person familiar with its plans.

Aozora Bank, a Japanese bank owned by Cerberus, is contributing $1bn. Citigroup, which advised Cerberus, is putting in about $525m. The rest of the money is coming from up to 50 other investors, most of them limited partners in Cerberus funds or investors with whom the privateequity fund has worked with in the past.

Cerberus is expected to be left with $1.5bn$2bn exposure.

Cerberus' consortium is also investing $500m in new GMAC preferred stock. Of this, $150m$200m is coming from Citigroup. General Motors, which will be keeping 49% in GMAC, is investing $1.4bn in preferred stock.

GMAC shareholders have agreed to reinvest any aftertax dividends paid during the next two years in GMAC preferred stock.

Context News

Email a friend

Please complete the form below.

Required fields *