Friday, November 24, 2006

Carlyle/Club Deals

So, I just read that Carlyle is going to make a $5.46 billion bid for Advanced Semiconductor Engineering. Obviously they are not the sole bidder, but there's a consortium. I haven't a clue who the other firms involved could be. Just recently I did a research piece on these so called club deals where these larger firms are coming together to conduct these huge scale buyouts. Carlyle was somewhat of a late entrant into these larger club deals, but recently I believe that they have teamed up with J.P. Morgan, Clayton, Dubilier & Rice, KKR, Providence Equity Partners, and Bain Capital in such deals as Hertz, PanAmSat, and AMC Entertainment. I'd imagine they'd be teaming up with at least one of the aforementioned firms. Now I know the offer has not yet been made, but I wonder what the implications will be give that Carlyle was one of the firms named in the suit against larger private equity firms by investors in the companies they bought out.
In this case it doesn’t seem as if there are any other bidders, however the offer price is clearly a premium over the current stock price. The question is that if there was another group bidding for the company, would the price have been higher? Who knows. I would think yes, but there has to be some ceiling and having done their homework I would think that no one would bid much higher than what they perceive the worth to be. OR it could be because the so called collusion the lawsuit mentions where the firms all agree to not bid above an agreed-upon price. I find this hard to believe. And so I also believe the lawsuit has no merit. It should be interesting to see what happens with this deal and who the other firms involved are. I’d appreciate some feedback, or especially if someone has some further insight.

1 comment:

Aakar said...

I'm sorry I forgot to mention the recent VNU deal that Carlyle was also a part of.