Cerebus Capital To Sell Freedom Group Gunmakers

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thallub

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Cerebus Capital Management announced Freedom Group will be sold. Freedom Group includes Remington, Marlin, Bushmaster, Barnes Bullets and others.


(Reuters) - U.S. private equity firm Cerberus Capital Management said on Tuesday it will immediately begin selling its investment in gunmaker Freedom Group in light of last week's school shooting in Connecticut.

Pressure mounted on Cerberus as the California State Teachers' Retirement System (CalSTRS) said on Monday it was reviewing its investment with the private equity firm after the Connecticut school shooting.

CalSTRS had invested $751.4 million with Cerberus by the end of March 2012, according to its website.
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http://news.yahoo.com/cerberus-sell-gunmaker-freedom-group-u-school-shooting-062303957--sector.html
 
I don't see how this is bad news. Hopefully the freedom group is purchased by a corporation committed to producing quality guns above stripping everything to the bone for profit. Wouldn’t it be nice if the NRA got together with some wealthy pro gun folk and purchased Freedom group, then turned it into a gun owners gun company?
 
Their bottom line asset stripping almighty dollar attitude has ruined Marlin's reputation, hurt Remington's and reduced Bushmaster to a shell.
So now they are out of here and on to the next plum.
 
Remeber with remington haveing the new contract for M4 rifles that may keep the bushmaster group alive atleast to make the contract rifles for the military.
 
Hopefully this is a good thing. But on the other hand groups like Cerberus do not cave in to investors in a couple of days. Is it possible they see on the horizon an AWB?
 
groups like Cerberus do not cave in to investors in a couple of days. Is it possible they see on the horizon an AWB?
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More likely this has been in the works for a while, and they are now using this as a PR move:

"Cerberus...The multi-billion dollar corporation with a heart...

Let us invest your Teacher's retirement funds for you...

Our investors spoke, and We listened..."
 
Not only are there reports that Cerberus is selling Freedom Group, but it's being reported that Walmart will stop selling Bushmasters. Don't know if this applies to all AR's or not. Dicks Sporting goods announced today that they will halt the sale of AR's. There isn't a hedge fund more politically connected than Cerberus, and their announced exit from the business is writing on the wall. There is a freight train moving down the track, and this move by Cerberus and profit taking in Ruger and S&W shares indicate that investors are hedging. Both companies shares under heavy pressure.
 
In other news, Cheaper than Dirt has stopped listing firearms on their site. I tried a cached link and got this:

ctd_no.jpg
 
There isn't a hedge fund more politically connected than Cerberus, and their announced exit from the business is writing on the wall. There is a freight train moving down the track, and this move by Cerberus and profit taking in Ruger and S&W shares indicate that investors are hedging. Both companies shares under heavy pressure.
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Right now it's looking likely that there's going to be a huge fight over a new AWB... a fight that a week ago the smart money said was not going to happen. I do not know that a new ban is certain to pass, but it's going to be a ton closer than before if it doesn't.

If a new ban passes, parts of Freedom Group (DPMS, Bushmaster) will lose a ton of value since most of their products will either be no longer legal to sell to civilians or will require significant neutering for that market. This will greatly cut into their bottom lines. I expect investors are starting to think "get out while the getting is good" and then, if the push for a ban falters, they can buy back in at what is likely to be a lower price.
 
^^ Just another reason not to shop at Cheaper Than Dirt. Businesses that make knee jerk reactions like this don't deserve my business. If they were a true supporter of the 2nd Ammendment they would dig in their heels.
 
If a new ban passes, parts of Freedom Group (DPMS, Bushmaster) will lose a ton of value since most of their products will either be no longer legal to sell to civilians or will require significant neutering for that market. This will greatly cut into their bottom lines.
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Their bottom line already stinks. The Freedom Group is saddled with over $600 million in debt. Many of us thought that buying them was a weird decision for Cerberus at the time.

While the timing suggests political pressure, I think this was just a good excuse for them to look good while cutting their losses.
 
Remember that remington has the contract for the next run of M4 carbines . That alone could keep bushmaster produceing carbines with remmy roll marks maybe. They may end up more like colt was before they lost out on M4 rifles.
 
A large investor in Cerberus has the ability to influence their decision making. There are few as large as California's teacher's retirement organization. They swing a pretty big stick and when followed by other state teacher's retirement funds that makes for a very loud voice in the board room.
 
Interesting, I wonder as to how much money might be lost in this transaction?

Also, the following. Heard on a radio newscasat, Public Radio earlier today, that Dicks, a large sporting goods outfit has removed "modern hunting rifles" from sale. This is supposedly "temporary", Who knows.
 
I agree with others that this isn't bad news. All the Cerebrus brands were going downhill fast. They are selling their interest, not shutting the doors. We will all be better off for this bit of news in 5 years.

Several Lodge employees at Dicks have reported they packed up the inventory and it is being removed from stores. That isn't short term.
 
@John: Dicks was always overpriced, hopefully that invintory goes right back to the distributors and then onto the open market again!
 
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