Blackstone, KKR, TPG to settle deal collusion lawsuit - source

Thu Aug 7, 2014 11:01am EDT

Aug 7 (Reuters) - Blackstone Group LP, KKR & Co LP and TPG Capital LP have agreed to settle a U.S. lawsuit accusing them of conspiring not to outbid each other and other buyout firms on takeovers of companies, a person familiar with the matter said.

A court filing on the settlement is expected as early as Thursday, the source said, asking not to be identified because the filing has not yet been published.

The buyout firms did not admit wrongdoing as part of the settlement, the source added.

KKR disclosed its settlement in a regulatory filing early on Thursday. It did not disclose the settlement amount but described it as not material to its earnings.

"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," KKR said in a statement.

Blackstone declined to comment while a TPG official did not immediately respond to a request for comment.

The settlement makes Carlyle Group LP the sole private equity firm still facing trial among 11 firms originally accused of colluding in deals prior to the financial crisis. A Carlyle representative declined to comment.

A trial is scheduled for Nov. 3.

Last month, 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.

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.

The case is Dahl et al v. Bain Capital Partners LLC et al, U.S. District Court, District of Massachusetts, No. 07-12388. (Reporting by Greg Roumeliotis in New York; Editing by Tom Brown)

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