(Adds Carlyle comment, paragraph 13)
By Jonathan Stempel
July 11 Silver Lake Partners LP has agreed to
pay $29.5 million to settle a lawsuit that accused several large
private equity firms of conspiring not to outbid each other on
takeovers prior to the financial crisis.
The settlement was disclosed in a filing late Thursday in
federal court in Boston.
It came one month after Goldman Sachs Group Inc and
Bain Capital Partners LLC agreed to pay $67 million and $54
million respectively to settle their portions of the litigation.
Blackstone Group LP, Carlyle Group LP, KKR &
Co and TPG Capital Management LP remain
defendants. They have said the case lacks merit. A trial is
scheduled for Nov. 3.
The lawsuit was brought in December 2007 by shareholders of
a group of companies that the private equity firms bought.
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 buyouts 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 Inc, food service firm Aramark Corp, chipmaker
Freescale Semiconductor Inc, casino operator Harrah's
Entertainment Inc, hospital chain HCA Inc, pipeline operator
Kinder Morgan Inc, software maker SunGard Data Systems Inc and
power company TXU Corp, now called Energy Future Holdings.
Silver Lake specializes in technology. It was accused of
wrongdoing in connection with the $11 billion SunGard buyout,
which it led, and Freescale, which was acquired by a
"While we continue to believe that the plaintiffs' claims
about Silver Lake are baseless and without merit, we concluded
that it was in the best interest of our limited partners to put
this matter behind us, and end over six years of litigation,
expense and distraction," Silver Lake said in a statement.
The settlement "gets money back into shareholders' pockets,"
said Patrick Coughlin, a lawyer at Robbins Geller Rudman & Dowd
representing the plaintiffs.
"We have four big defendants left, and so far there is no
indication that any of them want to settle," he added. "We feel
our case is strongest against these four, and are confident."
Representatives of Blackstone, Carlyle, KKR and TPG all
declined to comment.
The case is Dahl et al v. Bain Capital Partners LLC et al,
U.S. District Court, District of Massachusetts, No. 07-12388.
(Editing by Jeffrey Benkoe)