Apollo Global Management LLC and Providence Equity Partners Inc. won dismissal of a bid-rigging case from a judge who let stand conspiracy claims against other financial firms, including Goldman Sachs Group Inc.
U.S. District Judge Edward Harrington rejected motions to throw out claims against Blackstone Group LP, Bain Capital Partners Inc., Carlyle Group LP, KKR & Co., Thomas H. Lee Partners LP, Silver Lake Technology Management, TPG Capital LLP and Goldman, according to a filing in Boston dated July 16 and posted in the docket today.
A trial may now proceed on claims by shareholders of acquired companies that the private-equity firms and banks conspired to rig bids. Harrington in March denied motions by all of the financial firms to dismiss the case, though he did limit the basis on which the conspiracy counts could continue. The ruling posted today stemmed from that narrowed focus.
“The evidence only supported an overarching agreement between the defendants to refrain from jumping each other’s announced proprietary deals,” Harrington said in the new order. As for Apollo and Providence, Harrington said, “the evidence does not support a connection to the overarching conspiracy.”
Charles Zehren, a spokesman for Apollo, and Andrew Cole, a spokesman for Providence, declined to comment on the ruling.
Individuals and pension funds that held shares in companies including Freescale Semiconductor Ltd., Neiman Marcus Group, HCA Holdings Inc. and Aramark Holdings Corp. sued in 2007 and 2008, claiming “a conspiracy among private equity firms to rig bids, restrict the supply of private equity financing, fix transaction prices and divide up the market for private equity services for leveraged buyouts.”
The financial firms argued at a December hearing that the plaintiffs hadn’t provided evidence of an “overarching conspiracy.” They also said the transactions represented legitimate practices of the mergers and acquisitions business.
One of the largest deals named in the suit was the $32.1 billion buyout of HCA by companies including KKR and Bain.
“There is no evidence that Providence was involved in the HCA and Freescale transactions and the evidence of its involvement in other transactions is insufficient,” Harrington said. “Apollo’s ultimate decision not to jump the HCA deal does not, on its own, tend the exclude the possibility that its decision was independently arrived at.”
The case is Dahl v. Bain Capital, 07-cv-12388, U.S. District Court, District of Massachusetts (Boston).