|December 18, 2012|
|Weber Shandwick Works Sale of Assault Rifle Maker|
|By Greg Hazley|
|Weber Shandwick is advising Cerberus Capital Management as the private equity firm moves to sell Freedom Group Int'l, the gun maker that produced the assault rifle used in the Dec. 14 Newtown, Conn., school shooting.|
Cerberus said in the wake of the rampage, which killed 26 people, including 20 children, it is moving to sell its six-year-old stake in FG.
"It is apparent that the Sandy Hook tragedy was a watershed event that has raised the national debate on gun control to an unprecedented level,” the private equity firm said today. “The debate essentially focuses on the balance between public safety and the scope of the Constitutional rights under the Second Amendment. As a firm, we are investors, not statesmen or policy makers. ... It is not our role to take positions, or attempt to shape or influence the gun control policy debate."
Weber Shandwick’s New York-based financial practice, led by executive VP Peter Duda, is counseling Cerberus, an existing client of the Interpublic unit.
Cerberus, which bought FG for a reported $76 million in 2006, added that it will retain a financial advisor to sell its stake and return the capital to investors.
“We believe that this decision allows us to meet our obligations to the investors whose interests we are entrusted to protect without being drawn into the national debate that is more properly pursued by those with the formal charter and public responsibility to do so,” the company said.
The perpetrator of the school shooting used a Freedom Group-made Bushmaster .223 rifle, along with two handguns, in the murders. A Bushmaster gun was also used in the 2002 Washington sniper shootings and the Aurora, Colo., massacre earlier this year.
The New York Times last year called Freedom Group the "most powerful and mysterious force in the American commercial gun industry today."
Third quarter 2012 sales were $237.9M with net income of $16.1M across units that also include Remington Arms.
FG, based in Madison, N.C., named firearms industry PR pro Ted Novin in March as director of public affairs and relations. He previously directed PA for the National Shooting Sports Foundation, a gun industry trade group, and was managing partner at a small crisis PR firm called Kincade Communications. He also held PR posts with the National Rifle Association and PR firm Spectrum.
Outdoor and gun retailer Dick's Sporting Goods also said today that it has removed all guns from sale and display in its stores near Newtown and suspended the sale nationally of "modern sporting rifles" -- a gun industry term for weapons commonly called assault rifles.
"We continue to extend our deepest sympathies to those affected by this terrible tragedy," the company said in a statement.
Shares of other gun makers Smith & Wesson and Sturm Ruger & Co. have fallen as much as 10 percent following the shooting, despite a broad rally in markets over expectations of a "fiscal cliff" deal.
The National Rifle Association, which had been silent on the Newtown tragedy, released its first response in the form of a statement on Tuesday.
"The NRA is prepared to offer meaningful contributions to help make sure this never happens again," said the group, which slates a press conference in D.C. for Friday, Dec. 21.
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