Blackstone, KKR, TPG in talks to settle deal collusion lawsuit -sources

July 17 Thu Jul 17, 2014 8:37pm EDT

July 17 (Reuters) - Blackstone Group LP, KKR & Co LP and TPG Capital LP are in talks to settle a U.S. lawsuit accusing them of conspiring not to outbid each other and other buyout firms on takeovers of companies, two people familiar with the matter said on Thursday.

Details of the talks could not immediately be learned. If all three firms settled, Carlyle Group LP would be the sole private equity firm still facing trial among 11 firms originally accused of colluding in deals prior to the financial crisis.

It could not be immediately established whether Carlyle is also engaged in settlement talks at this stage. A trial is scheduled for Nov. 3. Representatives for Blackstone, KKR, TPG and Carlyle declined to comment.

Last week, Silver Lake Partners LP said it agreed to pay $29.5 million to settle the case. This followed a $67 million settlement with Goldman Sachs Group Inc's private equity arm and a $54 million settlement with Bain Capital LLC last month.

The lawsuit was brought in December 2007 by shareholders of a group of companies that the private equity firms bought. Apollo Global Management LLC, Providence Equity Partners Inc, JPMorgan Chase & Co and Thomas H. Lee Partners LP later managed to get dismissed from the case.

The firms were accused of conspiring to reduce competition by following "club rules," often teaming up on buyouts and providing quid pro quos to influence each other's behavior.

Twenty-seven buyout deals were originally part of the case. In the eight that remain, the private equity firms are accused of collusion by having agreed not to "jump" each other's bids after buyouts were announced.

The eight remaining buyouts are movie theater chain AMC Entertainment Holdings Inc, food service firm Aramark , chipmaker Freescale Semiconductor Ltd, casino operator Caesars Entertainment Corp, hospital chain HCA Holdings Inc, pipeline operator Kinder Morgan Inc , software maker SunGard Data Systems Inc and Texas power company TXU, now called Energy Future Holdings.

Dow Jones LBO Wire first reported that Blackstone and KKR were in settlement talks over the lawsuit. It also reported, citing its sources, that a settlement agreement could be reached in the next few weeks. (Reporting by Greg Roumeliotis in New York; Editing by Lisa Shumaker)