* Deal could be "grossly overpriced" : CEO
* Freedom Group owned by PE firm Cerberus Capital
* Cerberus under pressure to sell Freedom after Newtown
April 30 Gunmaker Sturm Ruger & Co Inc
said it was looking at the accounts of up-for-sale rival Freedom
Group but said it was unlikely it would make a bid.
Sturm Ruger Chief Executive Michael Fifer said Freedom could
be an acquisition opportunity and his company was looking at
their books but he expects a deal to be grossly overpriced.
"I don't actually expect it to go a lot further than that,"
Fifer said at the company's annual meeting of stockholders on
Tuesday. "We'll have to see what the pricing comes out."
Freedom Group, owned by private equity firm Cerberus Capital
Management LP, had sales of $931.9 million in 2012.
Cerberus has come under pressure from the public as well as
investors in its funds to sell Freedom Group after an AR-15 type
Bushmaster rifle manufactured by the company was used in last
year's Newtown school massacre.
Cerberus and representatives of Freedom Group could not be
reached for comment immediately.
Cerberus, owned by private equity mogul Stephen Feinberg,
bought firearms maker Bushmaster in 2006 and later merged it
with other gun companies to create the Freedom Group.
"There are a lot of companies I would like to buy but they
are not for sale. If there are any downturns and maybe the
market overreacts, then something will become affordable. But as
we stand here today, I don't see any meaningful acquisition
opportunities," Fifer said at the meeting.
Shares of Sturm Ruger, which has a market cap of about $1
billion, closed up marginally at $51.27 on the New York Stock
Exchange on Tuesday.
The company reported record quarterly sales on Monday,
boosted in part by fears that impending legislation could ban
the manufacture of certain high capacity guns.
Fifer said the company was searching for a manufacturing
facility to develop new products and meet demand but would not
spend on building one.
The company expects to spend about $30 million as capital
expenditure in 2013.