Cerberus CEO drops stalking horse bid for Freedom Group -source

NEW YORK, July 3 Wed Jul 3, 2013 4:28pm EDT

NEW YORK, July 3 (Reuters) - Stephen Feinberg has scrapped a bid for the maker of the Bushmaster rifle, which his private equity firm, Cerberus Capital Management LP, put up for a sale after one of its guns was used in the Newtown, Connecticut school shooting in December, a person familiar with the matter said on Wednesday.

Cerberus CEO Feinberg was putting together a consortium to make a stalking horse offer designed to spur competition for the rifle maker, Freedom Group, Reuters reported in April.

Feinberg no longer sees the need to make an offer for the gun company, the person said, because Freedom Group is in dialogue with a number of industry players, as well as financial investors, and he views the sale process as robust.

No deal has been agreed to and talks with the potential buyers are ongoing, the person added.

Cerberus declined to comment, while Freedom Group did not respond to a request for comment.

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