Cerberus sued over United Rentals failed buyout
NEW YORK (Reuters) - A investment fund sued Cerberus Capital Management LP CBS.UL for fraud on Wednesday over the failed buyout of United Rentals Inc (URI.N), saying the private equity firm's alleged misrepresentations cost it millions of dollars.
New York-based Amida Capital Management II LLC alleged in a complaint filed in U.S. District Court in Manhattan that Cerberus "intentionally made deceptive and material misstatements regarding the positive effects of the merger" on United Rentals common stock.
"Although defendant knew that it did nor intend to consummate the merger as early as August 2007, it made false statements and promises regarding the merger to potential investors," it said in the complaint.
"As a matter of policy, Cerberus does not comment on pending litigation," a Cerberus spokeswoman said.
Amida said it bought about $3 million of United Rental common stock in the months after Cerberus agreed to buy United Rentals for $34.50 a share in July 2007.
Amida boosted its holding by another $14.4 million of the equipment rental group's stock after a November roadshow by Cerberus, where the private equity firm said it found its investment attractive notwithstanding the credit crisis and expected the deal to close as planned, the filing said.
"Cerberus emphasized that the poor condition of the credit and financial markets did not affect Cerberus' optimistic view of the merger," Amida said.
But the deal subsequently fell apart, leading to a fall in United Rentals' stock price.
(Reporting by Paritosh Bansal; Editing by Andre Grenon)
- Tweet this
- Share this
- Digg this
FRANKFURT - New solar installations reached a fresh record of 7.5 gigawatts (GW) in Germany in 2011, playing into the hands of advocates for steeper cuts in tariff subsidies to reduce growth of solar power and the resulting higher costs for consumers.