Thomas H. Lee

SPOTLIGHT: Texas trial

Fri, 04 Apr 2008 07:59:52 -0400

This could get interesting. The Clear Channel trial is set to take place in a Texas state court. Citigroup, Morgan Stanley, and others who balked at financing the $19 billion deal on behalf of Bain and Thomas H. Lee Partners have a lot on the line. Article

Banks still balking at Clear Channel deal

Wed, 26 Mar 2008 07:59:58 -0400

The Clear Channel saga continues, and it may end in court. At issue: Bank financing for the nearly $20 billion deal. The two buyout firms--Bain Capital and Thomas H. Lee Partners--seem willing to go to court (and the media) to force banks to honor their commitments, according to the New York Times. You can't really blame the banks, which include Citigroup, Wachovia and Morgan Stanley. They are balking because they are still choking on leveraged loan debt and can't handle much more. If they find an out, they would be liable for a $660 million breakup fee, according to the Times. That's far better than taking a roughly $3 billion loss on the loans, especially at a time, when they face additional leveraged loan write downs in coming quarters.

For more:
- here's the Times article

Related Articles:
Wachovia to bust Clear Channel deal. Article
Hedge funds prevail, Clear Channel bids to go higher. Article
Clear Channel morphs into a test of wills. Article

Who's to blame for the Refco mess?

Thu, 09 Aug 2007 06:59:57 -0400

Recall that commodities brokerage Refco collapsed in 2005, just a few months after its IPO. What a mess. But who is to blame? Well, adding yet another bit of bad news to the private equity industry's recent litany, the trustee of the firm has sued the private equity firm that took it public, Thomas H. Lee. The firm bought out the company 2004. The thrust of the complaint is that the firm should have known about some of the accounting irregularities that ultimately doomed the company. The suit does not allege that the firm knew about the massive fraud that was later uncovered. For its part, Thomas H. Lee intends to sue Grant Thornton, Refco's former auditors, and are looking at others "responsible parties."

For more:
- here's a New York Times article

More on hedge funds vs. private equity funds

Tue, 17 Apr 2007 20:01:38 -0400

There seems to be a bit more tension these days between hedge funds and private equity funds. One example: The $8 billion buyout of Aramark Corp. Goldman Sachs, CCMP Capital Advisors and J.P. Morgan Partners, Thomas H. Lee Partners and Warburg Pincus took it private earlier this month, with shareholder approval. But Metropolitan Capital Advisors, led by Karen Finerman, argued that the deal undervalued the company. We may be in for more activist type hedge funds voting against deal proposals. ClearChannel offers another example of sorts (see next item). It agreed to a deal by Thomas H. Lee Partners and Bain Capital, but the likes of Highfields Partners and Fidelity have put up a fight. They'll vote against the deal, which they say undervalues the company. The biggest area of controversy has been over debt covenants. Some private equity firms are said to have black lists.

For more:
- here's a MarketWatch article

Hedge funds prevail, ClearChannel bid to go higher

Tue, 17 Apr 2007 20:01:37 -0400

Shareholders of ClearChannel were widely expected to reject a buyout offer from Thomas H. Lee Partners and Bain Capital. A few shareholders, notably Highfields Partners, made a huge stink about what they saw as an undervalued offer, and they appear to have won. The two private equity firms will sweeten their offer by $1.5 billion, raising it to $27.6 billion. An announcement is coming today. Until now, the firms said they could not go any higher. The new deal seems to reflect more debt, not an increased equity portion from the firms. It isn't a forgone conclusion that this offer will be viewed favorably. A shareholder vote was scheduled for this week will likely be pushed back a bit, giving people time to digest all this. Stay tuned.

For more:
- here's the New York Times article

Analyst at odds with PE firms

Wed, 28 Mar 2007 20:01:38 -0400

Victor Miller has been ranked the No. 1 analyst for radio and TV by Institutional Investor for the past five years. So it is a big deal that he has concluded that an offer by Thomas H. Lee Partners and Bain Capital undervalues Clear Channel to the tune of $6.69 a share, about $3 billion. The conclusion can't easily be written off given the stature of the Bear Stearns analyst, but his estimates have been questioned by the private equity firms. Some shareholders have seized on his analysis and will likely vote against the deal. You have to wonder if we'll see more of this. For all the negative talk, sell-side research is still seen as valuable. Such battles could turn nasty, as you can imagine. I would hate to see PE firms start trashing analysts that don't tow their line.

For more:
- here's a New York Post article

Benefits of private equity firm IPO are clear

Tue, 20 Mar 2007 20:01:37 -0400

When you think about it, it makes a lot of sense for private equity executives to rail against Sarbanes-Oxley and at the same time consider a public offering. True, they will have some compliance headaches that they do not currently have. But the benefits are just too awesome. All alternative investment funds would like a stable source of long-term capital without the onerous restrictions imposed by institutional investors. Also, they may certainly benefit from another currency with which to expand. This is also a great way to reward your managers. So people are pretty much convinced that the Blackstone Group is onto something. Others that might follow suit include all the big names: Bain Capital, Carlyle Group, KKR, Texas Pacific Group and Thomas H. Lee Partners.

For more:
- here's a MarketWatch column

Clear Channel deal morphs into test of wills

Tue, 06 Mar 2007 19:01:38 -0500

Has a great private equity firms vs. shareholders battle begun? Well, it sure has when it comes to Clear Channel Communications. Shareholders have been more than pissed about the $18.7 billion deal management struck with Thomas H. Lee Partners and Bain Capital. The sale would be the largest buyout in the media industry, but the likes of Fidelity Investments say they are getting a bum deal. They say the deal sorely undervalues their holdings. So the annual meeting, three weeks away, is shaping up as a real fight. Fidelity and others will likely vote against the deal. But the would-be buyers are standing firm. In fact, they say they will walk away if the deal is voted down. One issue here is whether this will become a harbinger. If the shareholders succeed, my bet is that we will see more.

For more:
- here's a New York Times article
- more private equity news

Battle for Home Depot taking shape?

Thu, 01 Mar 2007 19:01:37 -0500

Nothing would get Wall Street's juices flowing like a good old-fashioned buyout battle. People are still wondering whether the Blackstone Group will take on KKR and Texas Pacific for TXU. If it did, it would make for some odd partnerships--odd for anywhere except the clubby private equity world. Home Depot just might auction itself, and the list of interested sponsors include the following: a team that includes Bain Capital, Carlyle and Clayton Dubilier & Rice; a team of Thomas H. Lee Partners, Goldman Sachs and the CCMP and a third that includes the Blackstone Group, KKR, Leonard Green Partners and Texas Pacific Group. So there you have it. The two preeminent firms could both be partners and competitive bidders. This makes the anti-trust case that much more complicated.

For more:
- here's the Financial Times article

Private equity firms eye newspapers

Sun, 29 Oct 2006 19:01:37 -0500

There are three clubs with designs on the Tribune Company: Providence Equity Partners, Madison Dearborn Partners and Apollo Management; Thomas H. Lee Partners and the Texas Pacific Group; and the Carlyle Group and Bain Capital. The notion of private equity executives running some premiere names in American journalism is intriguing. For many, this seems like a looming disaster. If you laden these companies with debt and demand new financial efficiencies, it seems that the core journalism will suffer, fewer editorial employees, fewer bureaus, etc. Then again perhaps the private equity guys have a vision that is all new and can preserve the public function of these properties. It will be very interesting.

For more on this:
- Here's a New York Times article