Blackstone, KKR, TPG in talks to settle deal collusion suit

  • Carlyle could be last firm still facing trial
  • Once, 27 deals by 11 firms were at issue
  • Trial looming, scheduled for November

Details of the talks could not immediately be learned, according to sister news service Reuters. If all three firms settled, The Carlyle Group 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.

Earlier in July, 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, GS Capital Partners, and a $54 million settlement with Bain Capital in June.

The lawsuit was brought in December 2007 by shareholders of a group of companies that the private equity firms bought. Apollo Global Management, Providence Equity Partners, JPMorgan Chase and Thomas H. Lee Partners 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.

Greg Roumeliotis is a correspondent for Reuters in New York.