Betting on the outcome of a buyout is no easy feat. Will there be a heated auction? Or will the bidders have doubts and want price concessions?

The result is often much volatility. Just look at Beckman Coulter (BEC), a top medical diagnostic instruments company. In early December, the company put itself up for sale and the stock price surged to $72. Since then, the shares have traded in band of $71 to $75.

Continue reading Danaher Shells Out $6.8 Billion for Beckman Coulter

Danaher Shells Out $6.8 Billion for Beckman Coulter originally appeared on BloggingStocks on Mon, 07 Feb 2011 10:00:00 EST. Please see our terms for use of feeds.

As the economy rebounds and credit markets warm up again, it looks like private equity firms are going back to work -- on big deals. According to Bloomberg.com, Apollo Global Management is prepared to offer $12 billion for Sara Lee (SLE). The transaction would also include investor C. Dean Metropoulos -- who bought Pabst Brewing in 2010 -- as well as Bain Capital and TPG.

It looks like this is a viable offer even though a strategic buyer is interested (which often can justify a higher valuation). This is JBS SA, a beef processor based in Brazil. An acquisition would certainly have lots of synergy, creating a vertical operation. Interestingly enough, JBS may seek the help of the Blackstone Group (BX).

Continue reading Buyout Interest Heats Up for Sara Lee

Buyout Interest Heats Up for Sara Lee originally appeared on BloggingStocks on Mon, 24 Jan 2011 11:30:00 EST. Please see our terms for use of feeds.

J. Crew Group (JCG) was nearly 17% higher Tuesday morning thanks to rumors of a potential buyout.

The Wall Street Journal (subscription required) reported that a pair of private equity firms are closing in on a deal to purchase J. Crew for $43.50 per share cash, or $3 billion. One of the potential new owners is TPG Capital, a former owner of the company. TPG would hold a 75% stake in the company, with LA-based Leonard Green & Partners owning the remaining 25%. TPG previously owned an 88% stake in JCG in 1997.

Continue reading J. Crew Rallies on Buyout Rumors

J. Crew Rallies on Buyout Rumors originally appeared on BloggingStocks on Tue, 23 Nov 2010 11:00:00 EST. Please see our terms for use of feeds.

Continue reading Radio Shack: Takeover or Acquisition Target

Radio Shack: Takeover or Acquisition Target originally appeared on BloggingStocks on Fri, 02 Jul 2010 17:30:00 EST. Please see our terms for use of feeds.

In October, private equity powerhouse, TPG, scored a big win as it took Myer (which is a retailer based in Australia) public. The gains came to a mouth-watering $1.46 billion.

But now there's a huge problem; that is, the Australian tax authorities sent TPG a bill for a whopping $628 million. Its for back taxes, as well as penalties.

Continue reading TPG gets whacked by a $628 million tax bill

TPG gets whacked by a $628 million tax bill originally appeared on BloggingStocks on Wed, 25 Nov 2009 13:30:00 EST. Please see our terms for use of feeds.

There are chills spreading across the executive suites in Corporate America. As seen with the latest from the U.S. pay czar, there will be 50% pay cuts -- on average -- for 175 executives of firms that received federal money.

Might this spread like a virus?

It's too soon to tell. However, there has been a refuge; that is, private equity. Right?

Continue reading TPG coughs up $20 million in fees. Huh?

TPG coughs up $20 million in fees. Huh? originally appeared on BloggingStocks on Thu, 22 Oct 2009 12:30:00 EST. Please see our terms for use of feeds.

One consequence of the credit crisis shutting off the debt financing LBOs used to make acquisitions is that private-equity executives increasingly find themselves feuding over power, money, and strategy. Bloomberg provides details of the ouster of Dominique Megret, former CEO of PAI Partners, France's biggest private-equity firm.

Lionel Zinsou and others partners delivered an ultimatum to Megret: they wanted more say in running the firm or they would resign from the investment committee.

Continue reading Private equity management grows increasingly cut throat

Private equity management grows increasingly cut throat originally appeared on BloggingStocks on Tue, 29 Sep 2009 17:40:00 EST. Please see our terms for use of feeds.

Back in October 2007, Silver Lake and TPG took Avaya private in an $8.2 billion deal. While the transaction involved a good amount of debt, it looks like the company has firepower. That is, Avaya has agreed to pay $900 million for Nortel Network's Enterprise division (the transaction will also involve $15 million in employee retention payments).

The transaction was the result of an auction, which appears to have had some juice. Keep in mind that Avaya's original bid was for $475 million.

Continue reading Avaya scoops up Nortel's telecom unit for $900M

Avaya scoops up Nortel's telecom unit for $900M originally appeared on BloggingStocks on Mon, 14 Sep 2009 13:20:00 EST. Please see our terms for use of feeds.

According to the Wall Street Journal, China's government recently has pushed development of its local private-equity industry so that Chinese investors can get in on the country's private-equity deals. To that end, Chinese officials have tried to lure foreign money managers to raise funds from local investors.

Hong Kong-based First Eastern Investment Group, which plans to raise six billion yuan through a new wholly owned Shanghai subsidiary, and Asian brokerage CLSA Ltd., which plans to raise a 10 billion yuan fund through a joint-venture with state holding company Shanghai Guosheng Co., are just the latest to establish local-currency private-equity funds in Shanghai.

Continue reading Private equity heats up in China

Private equity heats up in China originally appeared on BloggingStocks on Mon, 17 Aug 2009 18:30:00 EST. Please see our terms for use of feeds.

Private equity is about continuous dealmaking. But, with the wrenching credit crunch, activity has been horrible.

So, what to do? Interestingly enough, it looks like some of the top private equity operators are signing up for board duties.

Look at GM, which this week announced five new members to its board. In fact, three of them are from major private equity firms: The Carlyle Group's Daniel Akerson, S. J. Girsky & Co.'s Stephen Girsky and TPG's David Bonderman.

What's going on here? True, private equity has taken quite a few lumps over the past couple years. For example, Bonderman lost a bundle on his Washington Mutual transaction (which was one of the worst private equity deals in history).

Continue reading Next big thing for private equity? Board assignments

Next big thing for private equity? Board assignments originally appeared on BloggingStocks on Fri, 24 Jul 2009 15:00:00 EST. Please see our terms for use of feeds.

It was just a couple of weeks ago that BusinessWeek reported on Micron Technology Inc.'s (NASDAQ: MU) effort to diversify with an acquisition of DisplayTech, a producer of display screens such as those used as viewfinders for digital cameras. Micron, one of the largest memory chip makers in the semiconductor industry, has been reporting losses over the past two years due to steep declines in the price of computer memory.

DisplayTech has been developing a new technology called "pico projection," which can produce crisp images from small devices. This innovation could make it possible to deliver a business presentation from a BlackBerry without having to lug along a laptop and full-sized projector.

Continue reading Micron Technology shakes up its imaging business

Micron Technology shakes up its imaging business originally appeared on BloggingStocks on Tue, 02 Jun 2009 18:00:00 EST. Please see our terms for use of feeds.

Continue reading TPG: Just say 'no' to LBOs

TPG: Just say 'no' to LBOs originally appeared on BloggingStocks on Wed, 06 May 2009 09:30:00 EST. Please see our terms for use of feeds.

Buyout funds managed by private equity giants Apollo Management LP and Blackstone Group LP (NYSE: BX) are among a growing number of limited partnerships that have experienced sharp declines in value, reports the Wall Street Journal, which highlights the economy's impact on such funds, as well as the influence of mark-to-market accounting.

Apollo and Blackstone recently disclosed to investors the values of their last buyout funds at year-end. Apollo Investment Fund VI LP, a $10.1 billion investment vehicle that closed in 2005, was held at 34% below cost. Perhaps the most notable Fund VI deal is Harrah's Entertainment Inc., which has struggled with its debt covenants. Apollo and TPG Capital LP acquired Harrah's in January 2008 for $27.8 billion.

Continue reading The hits keep coming for private equity funds

The hits keep coming for private equity funds originally appeared on BloggingStocks on Sun, 26 Apr 2009 13:10:00 EST. Please see our terms for use of feeds.

Over the past few weeks, we've seen some of the extensive damage done to the mega private equity operators, such as the Blackstone Group LLP (NYSE: BX) and KKR.

Now, according to a report from Reuters, we've got the details on the performance of TPG. And, of course, it's ugly (interestingly enough, TPG's roots are in the distressed investing category).

Continue reading TPG gets crushed

TPG gets crushed originally appeared on BloggingStocks on Thu, 19 Mar 2009 17:00:00 EST. Please see our terms for use of feeds.

About 20 years ago, KKR fought hard to win the biggest buyout in history (at the time) - that is, the $25 billion purchase of RJR Nabisco. It was a crazy deal that ultimately turned into a best-selling book, Barbarians at the Gate: The Fall of RJR Nabisco. There was even an HBO movie about the antics.

Unfortunately, the RJR transaction turned out to be a dud. Actually, the company nearly went into bankruptcy. For the most part, the company had too much debt, which was a dangerous thing as the economy slowed down.

It was a tough lesson but KKR went on to post strong returns on subsequent deals. Right?

Continue reading KKR goes back to the future

KKR goes back to the future originally appeared on BloggingStocks on Wed, 04 Mar 2009 13:00:00 EST. Please see our terms for use of feeds.

Not long ago, institutions and sovereign wealth funds salivated over the opportunity to invest in private equity operations. But, as seen by the lowly stock prices of the Blackstone Group LLP (NYSE: BX) and Fortress Investment Group (NYSE: FIG), things are much gloomier now.

Interestingly enough, TPG has spent some time trying to drum up interest in an equity stake. And, it looks like there were serious talks with the Kuwait Investment Authority, the California Public Employees' Retirement System and the California State Teachers' Retirement System. However, according to a report in the Financial Times, it appears that negotiations have ended.

Continue reading TPG foregoes deal with foreigners

TPG foregoes deal with foreigners originally appeared on BloggingStocks on Wed, 04 Feb 2009 16:45:00 EST. Please see our terms for use of feeds.

It's been brutal for the chemicals industry. Dow Chemical (NYSE: DOW), for example, lost a multi-billion dollar joint venture deal with Kuwait. Then there was the implosion of the Huntsman (NYSE: HUN) buyout, which singed private equity operator, Apollo Management LP.

Now, there's another victim: Lyondell Chemical. The company, which is part of the LyondellBasell Industries AF empire, filed for bankruptcy.

Lyondell Chemical, a maker of polymers and petrochemicals, couldn't manage the price deflation as well as harsh materials costs. Although, the main problem was a $12.7 billion merger in 2007, which resulted in large amounts of debt.

Continue reading Private equity tries to feast on Lyondell blow-up

Private equity tries to feast on Lyondell blow-up originally appeared on BloggingStocks on Wed, 07 Jan 2009 12:47:00 EST. Please see our terms for use of feeds.

If you look at major private equity firms, they have huge amounts of capital ready for investment. So, when the credit crunch subsides, there should be a revival of buyout activity, right?

Not necessarily. Keep in mind that the amounts of capital available may be much lower. The reason: private equity firms usually have so-called capital calls. That means, over time they notify investors to pony up the required amounts of capital.

True, private equity firms are legally required to make the disbursements. But, if there is resistance, will private equity firms actually sue their investors?

Well, this is a big dilemma right now. Just look at TPG Capital. That is, according to The Wall Street Journal, the firm is paring back the capital requirements on its $20 billion fund. In all, it comes to about 10% of the total amount.

Something else: TPG will cut its management fees by 10%.

Of course, TPG has suffered some black eyes this year, such as its disastrous investment in Washington Mutual as well as big bets on bank debt.

Of course, the firm is not alone. Other tier-1 players are also sitting on some busted deals.

TPG's actions are certainly precedent setting - and are likely to be followed by its peers as we go into 2009. And, as a result, expect continued tepidness for deal-making.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

TPG caves in to investors originally appeared on BloggingStocks on Tue, 23 Dec 2008 00:00:00 EST. Please see our terms for use of feeds.

This week, some of the top veterans in private equity -- TPG's David Bonderman, Carlyle's David Rubenstein, and KKR's George Roberts -- got together at a conference in Hong Kong. And, all in all, it was fairly depressing (hey, I guess that's what happens when you lose billions and billions of dollars).

Take Bonderman. He thinks the downturn will be protracted, calling it an L-shaped recession (the more common description is a V-shaped recession, which means there is a strong snapback). In fact, he thinks U.S. unemployment will hit 10% or so.

Then again, keep in mind that Bonderman lost about $1.3 billion on his six month investment in Washington Mutual.

Despite all this, Bonderman still has an appetite for investments. For example, he's focusing on the debt securities from hedge funds. Because of massive redemptions, the prices are at distressed levels.

Rubenstein also gave a grim presentation (he thinks the downturn can last several years). But, he is still bullish on some opportunities, especially in Asia. For example, he thinks China offers some compelling valuations and that the country may become more open to outside investments.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Streetsmart Guide to Short Selling: Techniques the Pros Use to Profit in Any Market. He is also the founder of BizEquity, a valuation website.

Private equity's top guns remain glum ... but still finding deals originally appeared on BloggingStocks on Sun, 16 Nov 2008 16:40:00 EST. Please see our terms for use of feeds.

In short order, the shareholders of Washington Mutual (NYSE: WM) have lost billions. A tier-1 private equity investor, TPG, has lost $1.3 billion on the company. And, unfortunately, thousands of WaMu employees have lost their jobs.

However, there are some winners. For example, there are the short sellers. JP Morgan (NYSE: JPM) is also likely to do well since the firm bought WaMu's assets for a mere $1.9 billion.

But there appears to be yet another interesting beneficiary: Alan Fishman. He is WaMu's CEO, who took the top job 18 days ago.

As should be no surprise, he signed a juicy contract: a $7.5 million signing bonus and a lump-sum payment for severance that comes to $6.15 million. In other words, if he leaves the company, he'll walk away with $13.65 million.

That's a pretty good deal in light of the fact that WaMu is the biggest bank collapse ever.

Moreover, I suppose it is yet further evidence of why Americans have low regard for the financial system. And despite huge bailouts, it's probably a good bet that little will change.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He is also the founder of BizEquity, a valuation website.

WaMu's CEO: Bagging $13.65 million in 18 days? originally appeared on BloggingStocks on Sat, 27 Sep 2008 09:40:00 EST. Please see our terms for use of feeds.