Tags: Blackstone | KKR | TPG | lawsuit

Blackstone, KKR, TPG to Pay $325 Million to End LBO Lawsuit

Thursday, 07 August 2014 02:20 PM

Blackstone Group LP, KKR & Co. and TPG Capital LP, among the biggest alternative-asset managers, agreed to pay a combined $325 million to settle seven-year-old claims they colluded to keep leveraged-buyout prices low.

The accords, made public Thursday in a federal court filing in Boston, leaves two entities of Carlyle Group LP, the world’s second-biggest private-equity firm, as the only defendants in a trial scheduled to start Nov. 3. The settlements still need approval from a judge.

“Plaintiffs have overcome defendants’ attacks on multiple fronts, including early efforts to transfer the case, dozens of motions to dismiss and for summary judgment,” the plaintiffs’ lawyer Thomas Undlin said in the filing.

The complaint, filed in December 2007, listed 19 leveraged buyouts and eight related transactions in which the private- equity firms were accused of shortchanging shareholders in target companies out of billions of dollars by agreeing to suppress takeover bids. The defendants deny the accusations.

The prices were held down when the private-equity firms formed groups to take companies private, according to the complaint. The firms were accused of agreeing not to compete for exclusive deals and allocating transactions among themselves.

Rig Bids?

The firms argued at a December 2012 hearing that the plaintiffs hadn’t provided evidence of an overarching conspiracy to rig bids. The deals represented legitimate practices of the mergers-and-acquisitions business, they said. A judge in March 2013 refused to dismiss the case.

Plaintiffs, including the Police and Fire Retirement System of the City of Detroit pension fund and Minnesota-based investor Kirk Dahl, earlier settled with Bain Capital Partners LLC, the world’s biggest private-equity firm, for $54 million, according to the filing. Goldman Sachs Group Inc. settled for $67 million, while Silver Lake Technology Management LLC resolved the case for $29.5 million.

The earlier accords are scheduled to go before a judge for preliminary approval on Sept. 4, according to today’s filing.

“While we continue to believe that the plaintiffs’ allegations are spurious, we determined that after seven years it was best for KKR and our limited partners to put an end to the distraction and expense of this litigation,” the company said.

Blackstone didn’t immediately respond to a request for comment on the settlements. Lisa Baker, a spokeswoman for TPG, declined to comment.

“These claims are without merit and we will continue to vigorously contest the allegations,” Carlyle spokesman Chris Ullman said in a statement.

A federal judge dismissed suits against defendants including Apollo Global Management LLC and Providence Equity Partners Inc. over the past two years.

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Blackstone Group, KKR, and TPG Capital agreed to pay a combined $325 million to settle seven-year-old claims they colluded to keep leveraged-buyout prices low.
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Thursday, 07 August 2014 02:20 PM
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