Cerberus Capital Management may secure funding for a potential bid on General Motors’ financing arm GMAC from its portfolio firm Aozora Bank of Japan, a source familiar with the matter told Reuters on Monday.
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Aozora is considering contributing about US$1bn of an estimated $11bn bid for General Motors Acceptance Corp, the source told the news agency, which noted that GM has been looking to sell a controlling stake in GMAC to restore the profitable unit’s credit rating to investment-grade status and get access to cheaper financing.
Other Cerberus portfolio firms may invest in a deal alongside Aozora, an unlisted mid-sized lender in which Cerberus holds a majority stake, the Wall Street Journal reported, according to Reuters.
Aozora may seek to parcel out part of its investment through syndication or other deals with smaller institutions in Japan such as regional banks, the source told the news agency.
Japan’s Norinchukin Bank, a financial giant that serves as a central bank for the country’s farm cooperatives, is also considering joining the Cerberus-led push for GMAC, a source close to the bank reportedly said last week.
According to Reuters, Japanese business daily Nihon Keizai reported that Norinchukin may also invest around $1bn in GMAC.
Along with Cerberus, a private equity unit of Citigroup is also a leading bidder for GMAC, sources have told Reuters.
The news agency noted that GMAC provides automotive and commercial financing as well as mortgage and real estate services, and earned $2.8bn last year even as GM’s automotive operations lost money. Analysts reportedly have said a controlling stake in GMAC could fetch GM $10-15bn.
