Cerberus retracts $6.1 billion offer for ACS

by PegNews wire

The board was never totally sold on the offer to begin with.

DALLAS — Private equity firm Cerberus Capital Management LP announced that it has withdrawn its $6.1 billion bid for Affiliated Computer Services Inc., the likely result of a power struggle between ACS' board and chairman Darwin Deason.

ACS's board seemed reluctant to the offer from the beginning. Affiliated's Chairman Darwin Deason and Cerberus had made a $6.1 billion, or $62 per share, management-led buyout offer for the company in April, a month after the group had offered $5.9 billion for the company.

Conventional wisdom says that management-led buyout offers are problematic, often because they involve insiders trying to buy the company at an affordable price and cheating the company's stockholders. While there's no evidence Cerberus was intentionally trying to bilk ACS' stockholders, the proceedings dragged on through the summer and appeared to be heading nowhere.

Wall Street had tagged the ACS deal as destined to fail, with shares closing at $50.85 on the New York Stock Exchange on Tuesday, well below the $62 per share offer.

Source: Reuters, AP

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