Money may not be able to buy you Love -- but it sure can buy you a lot of Competitive Advantage, when it comes to taking-over the small-fry companies, who'd rather just be left alone.
It's rarefied air up there -- where the Corporate Take-over Titans do battle.
And according to these little noticed class-action suits being brought against them -- breaking Anti-trust rules may just be all in a day's work -- of divvying up the loot ... among Vultures.
Private Equity
Times Topics, NYTimes.com -- Oct 11, 2012
[...]
The 2,600 private equity firms in the United States are invested in 15,300 companies that employ about 8 million people, according to the Private Equity Growth Capital Council, the industry’s lobbying arm. Some of the largest private equity firms -- the Blackstone Group, the Carlyle Group, Kohlberg Kravis Roberts and Bain Capital -- oversee global empires that rival some of the mightiest public corporations.
[...]
The industry has exploded in scale and scope in recent years with some $3 trillion in global assets.
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Critics of the industry argue that private equity’s core investment strategy -- taking on large amounts of debt, helped by tax breaks on interest payments, to buy companies -- too often results in bankruptcies and job losses.
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Bain, Other Equity Firms Accused of Collusion
In court documents that lawyers for Bain Captial sought to keep secret, the company and other leading private equity firms are depicted as unofficial partners in a bid-rigging conspiracy aimed at holding down the prices of businesses they were seeking to buy.
[...]
Who says the "Free Market" will sort out 'the Winners from the Losers'?
When the sharks are turned loose in the aquarium with no rules constrain them -- 'the Losers' very quickly become Lunch.
The masters of Private Equity like to remind us that there is "No such thing as a Free Lunch" -- that someone always has to pay for whatever service or privilege we enjoy in society, as part of a Free Market economy.
What they don't tell us -- is that they work damn hard to make sure "the Free Lunch is on us" -- the clueless consumers.
These 2,600 Private Equity firms know that the rules of "fair play" and "competitive bidding" don't really apply to them. In the quiet, smoke-filled rooms, where the real action happens ...
by Eric Lichtblau and Peter Lattman, NYTimes.com -- Sep 11, 2012
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The corporate takeovers at issue in the lawsuit include the acquisition of prominent companies like Neiman Marcus, Toys “R” Us, Michaels Stores, Univision and the Loews and AMC movie chains, and they date from 2003 to 2007. The class-action shareholders’ lawsuit, which was first filed in 2007, has grown since then after a series of court ruling.
[...]
[pg 2]
In the buyout of HCA, for instance, Bain, K.K.R. and Merrill Lynch bought the company in 2006 for $32.1 billion, then a record. Documents produced by the defendants and filed this week showed e-mails and meetings indicating that other equity firms had agreed to “stand down” and avoid bidding with the understanding that they would be brought into future deals.
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In another deal, according to the plaintiffs, K.K.R. and Silver Lake Partners brought Bain into its $9.4 billion acquisition of Philips’s semiconductor unit, despite Philips’s insistence that Bain bid separately for the business.
“Disregarding Phillips’ demand that they remain competitors, Bain and K.K.R. and Silver Lake continued to collude and before final bids were to be submitted,” said the lawsuit, “cemented a secret deal whereby Bain would permit K.K.R. and Silver Lake to submit the winning bid and then invite Bain into its deal on equal terms.”
When they're the biggest fish in an ever-shrinking pond --
Who's going to stop them from bargain-dining on YOUR Employer next?
The DOJ? The SEC? The CFTC?
Shoot, with the hysteria the Big Fish have engrained about having to "Starve the Beast" -- it's a wonder that these watchdog agencies, can even keep count of all these "It's Just Business" shenanigans ...
Afterall 2600 take-over firms could really keep a Federal Agency swimming in circles, with all those ever-shrinking budgets and staffs and all.
Besides, if it's not about the price of gas, most people don't even know what the word "Collusion" means ...
Until it hits a small town near you. Bon appetit!