Billionaire Ron Perelman Sells AM General at Fire-Sale Price

By: Justin Davidson

Here is another sign that the Coronavirus has wrecked significant havoc for big businesses in the country.  Ron Perelman has agreed to sell AM General, the maker of Humvee military jeeps, at a fire-sale price.  As reported by the NY Post, the 77-year-old businessman and philanthropist didn’t disclose the price of AM General’s sale to buyout firm KPS Capital Partners.  Perelman reportedly sold his 70-percent share in the company, while the other 30 percent was sold by Ira Rennert.  The sale, announced on Wednesday by Perelman’s investment firm MacAndrews & Forbes, had insiders guesstimating that the deal brought in less than $1 billion.  That is well below the $2 billion Perelman was asking when he first listed the company two years ago.  In fact, it’s around the same price he paid for the company in 2004.  Alas, however, Perelman had made money off of dividends from the investment over the years, as per a source for the Post.  The rumored sale price is equivalent to about 6.5 times the company’s earnings, but well below the initial asking price of 10 times the earnings.

AM General is the latest in a whole list of assets that Perelman has been selling off since the COVID-19 pandemic infected large businesses.  Last week, Perelman was also looking to sell Scientific Games Corp, a maker of slot machines and other gambling products and services which he owns. By the end of July, the magnate is also seeking to raise up to $53.5 million through the sale of two masterpieces from his renowned art collection.

Perelman’s company, MacAndrews & Forbes Incorporated, has ownership in companies in a wide-range of sectors including groceries, makeup, cars, security, gaming, photography, television, camping supplies, jewelry, banks, and comic book publishing. Perelman still holds substantial shares in companies such as Deluxe Entertainment, Revlon, SIGA Technologies, Merisant, RetailMeNot, Scantron, Valassis, vTv Therapeutics and Harland Clarke.  Last week, a spokesman for Perelman said that the magnate had arranged a $1.8 billion debt deal in May for Revlon to help the cosmetics giant, of which he is also the Chairman, to endure the coronavirus.  The spokesman added that Perelman was looking to unload some of his assets “due to changes in the world both socially and economically”.  The spokesman told Bloomberg News that the divestitures “will allow us to be opportunistic and flexible in looking at new situations.”

Perelman, who in 2017 was named by Forbes as one of the “100 Greatest Living Business Minds”, now has a net worth of $8 billion. His fortune is less than half of what it was in early 2018, making him the 78th-wealthiest person in the US, as per the Bloomberg Billionaire Index.  He is annually one of the largest philanthropic donors in the world, having made notable donations to several universities, Judaic studies, museums, hospitals, cancer research, the World Trade Center Memorial Fund, and Republican election campaigns to name a few.

Spokespersons for Perelman and KPS declined to comment on the sale of AM General.