Carlyle Group’s David Rubenstein looks to be the last man standing in a long-running bid-rigging suit against the biggest buyout firms.
Three of the four remaining private-equity giants accused of conspiring to hold down deal prices are close to settling, leaving Carlyle as the lone defendant at a trial set for Nov. 3, sources said.
“My expectation is there will be a trial,” one source close to the situation said.
The buyout firms share joint responsibility in the suit brought by aggrieved shareholders in the acquired companies, which means Carlyle is liable for the full amount of damages in the case.
The suit claims seven buyout shops cheated shareholders out of billions by agreeing to steer clear of each other’s buyouts, thereby reducing competition.
The eight remaining buyouts in the case, including chipmaker Freescale Semiconductor, casino operator Caesars Entertainment and hospital chain HCA, total $170 billion.
Bain Capital, Silver Lake Partners and Goldman Sachs settled for a combined $150.5 million, while KKR, Blackstone Group and TPG Capital are expected within days to settle for a larger amount.
Even if Carlyle settles before the trial date, it will likely end up paying more than the previous settlements because ithas the most to lose, sources said.
“They dawdled and now they are stuck,” a source close to the case said.
E-mails from Carlyle’s executives have been held up as evidence that the firms agreed not to jump on each others deals.
A Carlyle executive allegedly wrote, “[s]ome have proposed we try to compete by participating in a competing deal. I do not think that is a good idea for many reasons, but particularly because I do not want to be in a pissing battle with KKR at the same time we are teaming on other deals elsewhere.”
A Carlyle spokesman said “the suit is without merit” but declined to comment on whether it is in settlement talks.
Blackstone declined to comment, and neither KKR nor TPG returned calls.