With Abraaj’s fate still up in the air, buyers have been flocking to buy the once great private equity firm. While most bids have yet to result in any deals or agreements, buyers have not let this dissuade them.
Now, the most recent company to throw in for a chance to manage Abraaj’s Middle East funds is the Abu Dhabi Financial Group (ADFG).
ADFG goes for take two
According to Reuters, who reportedly have seen an official document on the matter, the Abu Dhabi Financial Group has submitted a revised bid to acquire the management rights for the Middle East funds of Abraaj.
Reuters explains that in a letter to investors in Abraaj Funds, ADFG said that the bid is unlikely to materialize given the “convolution” of the situation.
“To address this, ADFG is seeking a dedicated budget to conduct a full forensic audit and a litigation budget,” Reuters explained. “Its new offer includes up to $6 million for the audit and litigation financing as well as a $10 million credit facility to fund the operations of the Middle East funds.”
The $10 million is in addition to $10 million earmarked separately for the fund manager’s liabilities.
“Such a dedicated budget is crucial not only to seek damages from previous management but also to ensure recoverability of funds for investors in the Middle East funds,” ADFG said in the letter seen by Reuters.
“This means there is a zero capital call requirement from all the 200 unique investors in the Middle East funds which will clear one of the major hurdles going forward for the protection of the assets.”
Abraaj has 10 Middle East funds involving some 200 investors from across the globe.
Buyers line up
The ADFG is among many other companies who have shown interest in acquiring Abraaj’s business. At its height, the Dubai-based private equity group managed $14 billion. Ever since February, when the company became embroiled in a mishandled health care fund controversy, it has been on a crash course.
Reports put Abraaj’s current debt at around $1 billion.
According to Reuters, more than a dozen bidders have shown interest in the ailing company’s so far.
American firm Cerberus Capital Management LP made a $25 million offer a couple months back for Abraaj’s asset management platform, which was the lowest bid they had received at the time. Cerberus pulled their offer soon after to revise it.
“Colony Capital Inc., whose earlier bid for Abraaj’s entire fund business was rejected, made an offer for its Latin American operations, while Helios Capital Management is bidding for the Africa platform, they said,” Bloomberg reports. “NBK Capital, the investment banking unit of National Bank of Kuwait, made an offer for Abraaj’s Middle East and North Africa business, they said.”
York Capital Management has offered about $400 million, including $350 million to buy Abraaj’s stakes in some of its private equity funds and the rest for the asset-management platform, people familiar with the matter told Bloomberg.
Earlier this month, British company Actis offered an astounding $1 for the acquisition of the Abraaj Fund Unit’s (AFU) assets. We discussed the underlying machinations most likely at play, here.