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An arbitrage firm is suing Cerberus Capital Management LP for fraud
over the buyout shop's failed purchase of United Rentals Inc., saying
the firm's statements cost it millions of dollars, according to press
reports.
Reuters reported Wednesday that New York-based Amida Capital Management
II LLC filed a complaint in U.S. District Court in Manhattan claiming
that Cerberus "intentionally made deceptive and material misstatements
regarding the positive effects of the merger" on United Rentals common
stock.
An Amida spokesman was unavailable for comment. Cerberus, also based in New York, agreed in July 2007 to buy the Greenwich, Conn.-based renter of construction and industrial equipment for $6.6 billion, or $34.50 per share in cash. That price represented a 25% premium to the stock's closing price April 9, 2007, the day before the target announced a strategic review. But then credit markets soured in the subprime mortgage crisis, and in November Cerberus indicated it wanted to back out of the deal. United Rentals went to court to try to force a closure of the deal, but in late December the company accepted a $100 million breakup fee and let its former suitor walk away. - Peter Moreira and John E. Morris See full story on TheDeal.com See related story: URI vs. Cerberus vs. URI See Dealwatch: Buyouts gone bust Categories Deal Video
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