Bring on the Politics
December 15, 2009
The holidays are a time to reflect, rejoice and reconvene with loved ones. In my family, it's a time to argue politics and create divisions that will last well into the New Year. Considering recent developments, I'm already looking forward to it.
As if on cue, we've got George Bush and the 22 million emails that suddenly turned up. This is going to be a fun debate, even if it's just an over/under on how many times the former president got Rickrolled. Somewhere around 40 feels right to me.
Then there's President Obama and his solution to the credit crisis, which is basically to beg lenders to lend. I think he was sitting in Santa's lap for the public address.
Closer to home, in the recent Senate primary in Massachusetts, Martha Coakley beat out Bain's Steve Pagliuca to represent the Democratic ticket. I'm still a newcomer to Massachusetts, but my initial reaction is that as an attorney general she has a flare for the hollow headlines. The landmark victory I keep hearing about was the $50 million settlement she wrested from Goldman Sachs related to subprime abuses. It's a microcosm of the nugatory reform efforts that already plague Washington.
(Matt Taibbi, in his latest Rolling Stone article, does a much better job than I can detailing how exhaustively fruitless our elected officials have become.)
Either way, all this will be sure to take us past the fruitcake portion of our Christmas dinner. And once the kids go off to bed for the night, we can turn to Tiger Woods.
On Terra Firma's website, the firm has a great catalogue of Guy Hands' quarterly letters to investors. They go back just far enough for Hands to come off like a complete boob.
There's this bit from the May 2007 letter:
I worry that private equity will simply buy large companies in order to put money to work and will not engage in the new difficult strategies and corporate change programmes which deliver real value.
Then there's this, from February of that year:
In most transactions this year, however, we have found that the market has been more bullish than us and we have seen even risky assets trade for record prices.
And my favorite is a gem from last year:
Our latest acquisition, that of EMI, is a great example of a quintessentially Terra Firma deal.
He goes on to list all of the attributes that make the deal "a Terra Firma" type of transaction. He lists five, but somehow skipped over price. "Opportunity for strong financing" probably pushed that off of the list.
All of this on its own actually doesn't sound that bad. What Hands doesn't say is that Citigroup hoodwinked him by failing to disclose that Terra Firma, by the time the auction closed, was bidding against itself. If you straighten Hands' hair, put him in a white jacket and aviator glasses, I can kind of see the resemblance to George Steinbrenner.
Terra Firma is now suing Citigroup for fraud, claiming that the firm should have offered up the news that Cerberus Capital Management pulled its offer. The lawsuit is one maneuver in a restructuring, but if I was a Terra Firma LP I'd officially lose it. In the minutes, it would actually say, "at this point, Ken lost his mind."
I keep seeing all these headlines about Goldman Sachs' and Bank of America's small business initiatives. The stories that surround these announcements make it sound like it's some form of charity. That's who I would want as my lender -- the bank that is already planning to writeoff the loan before it's even been made.
I'm guessing that most small- and middle-market business owners were much more relieved to see CIT re-emerge from bankruptcy last week. The firm almost looks spritely in its new iteration, committing $500 million to the small market. At least they know it's not a PR campaign.
Merger Mogul will be taking a break during the holidays, but readers can continue to follow Mergers & Acquisitions on Twitter at http://twitter.com/TheMiddleMarket . Have a happy holidays!
2 Comments
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Posted by: CHEN M | January 14, 2012 2:23 AM
Either way, all this will be sure to take us past the fruitcake portion of our Christmas dinner. And once the kids go off to bed for the night, we can turn to Tiger Woods. android tablet pc
Posted by: Knife M | December 7, 2011 9:38 PM
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