Brookfield Asset Management canceled its agreement to exchange debt to acquire Kerzner International Holdings’s Atlantis resorts in the Bahamas. “Two hedge funds got a temporary restraining order on Friday and, as a result of that, we have terminated the offer to acquire,” Andrew Willis, a Brookfield spokesman, said Wednesday in a telephone interview. “We’re reviewing all options.” Kerzner in November agreed to hand ownership of its flagship property to Brookfield, a Toronto-based investment firm, as part of a debt restructuring. Brookfield at the time planned to forgive $175m of junior debt for ownership of the Bahamas-based Atlantis and the Bahamas One&Only Ocean Club, as well as a half interest in the One&Only Palmilla in Mexico. The properties Brookfield planned to take over had about $2.6bn in debt when negotiations began. That would have shrunk to about $2.3bn, with Brookfield’s forgiveness and an earlier $100m payment that was part of a maturity extension. Jennifer Ferguson, a Kerzner spokeswoman, declined to comment today. Holders of Kerzner’s debt included Centerbridge Capital Partners, TPG Capital, Abu Dhabi Commercial Bank and Fidelity Investments, people familiar with the talks said last year.