October 11, 2012 / 12:00 AM / 5 years ago

Buyout executives emails purport to show collusion

Oct 10 (Reuters) - Senior executives at private equity firms including KKR & Co LP and TPG Capital LP sent emails that allegedly show them plotting to scoop up companies on the cheap during last decade’s leveraged buyout boom, according to court documents unsealed on Wednesday.

The emails are part of a lawsuit filed by shareholders in companies bought by private equity firms who claim to have lost billions of dollars because of the alleged conspiracy to hold down the value of takeover targets.

In one email, sent by an unnamed Blackstone executive, the private equity firm appears to admit it dropped out of bidding on KKR’s deal for hospital giant HCA even though the price amounted to “highway robbery”.

In another email, James Coulter, co-founder of TPG, wrote in an email that being aggressive in a deal for SunGard would make enemies “while perhaps benefiting no one but the (company‘s) shareholders”.

TPG said in a statement it never colluded to suppress prices in buyouts and when it chose not to bid it was acting in the best interests of its investors.

“We competed vigorously for deals that the firm both won and lost,” the firm said in an email to Reuters.

Blackstone declined to comment. KKR were not immediately available for comment.

The complaint was unsealed by an order of federal judge Edward Harrington in Boston.

The lawsuit was filed in 2007 by shareholders in more than two dozen companies bought by the private equity firms between 2003 and 2007. The shareholders cite takeovers such as the $32.1 billion leveraged buyout in 2006 of HCA by Bain Capital, KKR and others as examples of collusion between buyout firms.

The defendant firms argued that unsealing the complaint would “harm the competitive position of the defendants and their portfolio companies”.

The case is Dahl et al v. Bain Capital Partners LLC et al, U.S. District Court, District of Massachusetts, No. 07-12388.

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