The mooted privatisation of the Rebel Sport chain is a $400 million game – peanuts in private equity land. As demonstrated by a sample of one day’s private equity news:

  • If you’re Bill Gates, you are your own private equity fund. Gates’s Cascade Investments, Prince Alwaleed Bin Talal (Rupert Murdoch’s mate who owns a supportive 5.5% stake in News Corp) and Four Seasons CEO, Isadore Sharp, are bidding US$3.7 billion for the hotel chain. The offer is a 28% premium over Four Seasons’s Friday closing price. Alwaleed is on a bit of a pub crawl – he bought Canada’s Fairmont Hotels & Resorts Inc for US$3.24 billion in April and already owns Paris’ George V, which is managed by Four Seasons.
  • Merrill Lynch is the latest major firm to cop a “request for information” about its private equity arm from the US Justice Department. The department is investigating where there has been anti-competitive conduct among some private equity firms. CNN says other firms to have received the request are Carlyle Group, CD&R, KKR and Silver Lake. Last year Merrill Lynch’s private equity arm teamed with Carlyle and CD&R to buy Hertz for more than US$15 billion including debt. They’re now in the process of floating it for a US$4 billion profit.
  • The Smage carries a report from London that Jac Nasser is heading one of the private equity groups bidding about $1.2 billion for Aston Martin as Ford clears the decks. Jac rose to fame as the Melbourne boy who went from running Ford Australia to running Ford before being flicked. Those who took over from him did worse. Jac’s kicked on though, with his directorships including BHP, Brambles and BSkyB. Yes, he is a mate of Don Argus.
  • The AFR retails the strange rumour that private equity is sizing up Qantas as a takeover target. With the foreign ownership restrictions still in place, never mind the track record of the airline industry, it’s a weird $10 billion suggestion, but such are our rumour-plagued times. “Yesterday’s rumours even went as far as to suggest that Qantas had granted a private equity firm one month’s exclusive due diligence based on what would presumably have been a handsome enough takeover proposal,” reports the Fin. “The initial reaction is to wonder what a private equity fund would see in an airline given that, globally, a lot of money has been lost trying to rule the skies and earnings can be quite volatile.”

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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