Subject to shareholder approval later this year, Warren Buffet's Berkshire Hathaway and Brazilian 3G Capital will acquire food giant Heinz for USD 28 billion. It is a private equity buyout with a twist - appropriate for a company which marketed the phrase "57 varieties" - but the impact on Heinz workers will be similar to what workers have long experienced in leveraged buyouts: intense pressure on employment and working conditions as investors seek to wring out the last drop of cash.

Continue reading "The more things change: Heinz and the varieties of private equity buyout" »

Posted on March 1, 2013 07:46 AM | Permalink

Four years after initiating legal action, creditors of the bankrupt US retailer Mervyn's have won a major settlement from the private equity firms and banks which drove it out of business by piling on debt and stripping the company of cash. Bankruptcy resulted in the elimination of 18,000 jobs. Will it change the terms of the private equity debate which has resurfaced in the US with the nomination of former Bain boss Mitt Romney as the Republican presidential candidate?

Continue reading "Banks, buyout firms agree to major settlement in lawsuit charging planned bankruptcy of major retailer - a 'game changer' for private equity?" »

Posted on October 11, 2012 04:11 PM | Permalink

The October 31 collapse into bankruptcy of MF Global, the US brokerage firm with investment bank appetites and ambition, was the eighth largest corporate bankruptcy in US history, behind Lehman Brothers, Enron and Washington Mutual but ahead of automaker Chrysler. As with any bankruptcy, clients are scrambling to recover their money, but large sums have gone missing.

Continue reading "MF Global - canary in the (financial) coalmine?" »

Posted on November 7, 2011 09:32 AM | Permalink

Burton’s Biscuits, the UK’s second largest biscuit manufacturer (after private equity-owned United Biscuits), has announced it will close its factory in Moreton, Merseyside, with the loss of 342 jobs, despite commitments to the union at the site that production would continue through May 2012. Workers at the plant, represented by Unite the Union, are being squeezed by two converging financial forces: transnational food giant Kraft, for whom Burton’s manufactures Cadbury biscuits and chocolate products, and Burton’s private equity owners.

Continue reading "Kraft and Private Equity Slash and Burn at UK’s Burton’s Biscuits" »

Posted on March 24, 2011 05:31 PM | Permalink

Following 18 months of negotiations, the first-ever legislative regulation of private equity through a binding Directive was adopted by the European Parliament at the close of last year and will come into effect in 2013. What’s in it for workers?

Continue reading "EU Regulation of Private Equity: Results and Prospects" »

Posted on January 13, 2011 03:54 PM | Permalink

In a move which gives new meaning to “troubled asset recovery”, the Federal Reserve Bank of New York has gifted private equity giant Blackstone with USD 178 million. In early October, the Federal Reserve Bank of New York announced it had sold back to Blackstone USD 320 million in debt from the heavily leveraged 2007 Hilton buyout for just 142 million, booking a 56% loss. The difference between the face value of the debt – backed by Hilton properties – and the money taken in by the sale amounts to a USD 178 million public subsidy to the buyout house.

Continue reading "Blackstone surfs government Hilton subsidy to demand massive concessions from hotel workers" »

Posted on November 9, 2010 05:22 PM | Permalink

Are we witnessing a replay of the 2008 hyperinflation in the price of basic foodstuffs which pushed hundreds of millions of people already living on the margins into the ranks of the acutely hungry? In the past three months, the price of corn futures on the Chicago Board of Trade has increased by 70%

Continue reading "UN Special Rapporteur on the Right to Food Calls for Measures to Limit Food Commodities Speculation" »

Posted on October 20, 2010 05:21 PM | Permalink

Three months before becoming the world's largest hotelier (by rooms) with the 2007 leveraged buyout of Hilton Hotels Corporation, the private equity Blackstone Group unloaded the Extended Stay chain for USD 8 billion. It was a hell of a deal for Blackstone, who picked up the chain in 2004 for just under USD 2 billion.

Continue reading "Blackstone (& Friends) Buy Extended Stay Hotels - This Time at Half Price" »

Posted on July 13, 2010 05:52 PM | Permalink

How many surprises can still be in store at Accor, the French-based hotel and prepaid services transnational? In 2009, when private equity investors Eurazeo and Colony Capital boosted their stake to 30%, it was described as a "vote of confidence" in existing management.

Continue reading "Demerging Accor - Less Than the Sum of the Parts?" »

Posted on May 18, 2010 10:30 AM | Permalink

Blackstone Chairman Stephen Schwarzman, speaking from Davos, Switzerland, has warned Australia of a foreign investment "chill" following that country's efforts to collect taxes on a windfall deal from private equity giant TPG.

Continue reading "Blackmailing the Taxman, from Davos to Sydney" »

Posted on February 3, 2010 05:02 PM | Permalink