Thomas H. Lee

Tommy Lee Hosts The Clintons

Where did the Clintons go after it became clear they wouldn’t be headed to the White House next year? To the Hamptons, of course. Last week the Clintons too up residence in the bungalow of private equity titan Thomas H. Lee. Chelsea is said to have done a bit of shopping at J.Crew and A Little of What You Fancy.
Exotic Clinton Getaway in East Hampton [Daily Intel]

Texas lawyer Joe Jamail is the lead lawyer for Clear Channel, which has sued the banks that are trying to back out of financing the acquisition of Clear Channel by a pair of private equity firms. Clear Channel claims the banks hesitation amounts to tortious interference with the acquisition agreement. Although there’s little—or perhaps no—precedent for this kind of case, the banks being sued have reason to be afraid.
You see, Jamail famously won a $10 billion verdict for Pennzoil in a tortious interference suit in against Texaco. Pennzoil had agreed buy Getty Oil in 1984, but Texaco swept in and bought Getty before the deal had closed. The massive award forced Texaco into bankruptcy. At the time it was the largest judgment in American history.
Pennzoil wound up collecting only $3 billion after Carl C. Icahn, who was Texaco’s largest shareholder, helped negotiate a settlement with Jamail. Before the settlement, the two sides spent years battling each other. “The fight has been punctuated by thousands of hours of fruitless negotiations, legal wranglings, dashed hopes and charges by executives of both companies accusing the other side of greed, arrogance and duplicity,” the New York Times said in 1987.
So how did Icahn resolve things with Jamail? After the jump, Icahn reveals all in a standup performance at Carolines Comedy Club in 2003.

Read more »

Clear Channel and PE Firms Sue Citi

Clear Channel and the two private equity firms that planned to take it private, Bain Capital and Thomas H. Lee Partners, plan to sue Citibank and other lenders, The Deal Is reporting.
Shares of Clear Channel dropped softly yesterday after The Wall Street Journal reported on its website that the banks and the buyers had “failed to resolve their differences over final financing terms” and warned the deal was near collapse. The Clear Channel deal would be one of the biggest leveraged buyouts to collapse in the credit crunch.
“Clear Channel plans to file suit in state court in Texas for tortious interference with its buyout agreement. The buyers will sue separately to enforce the debt commitments given by the banks. Those agreements are governed by New York law, while the buyout agreement was struck under Texas law and the parties agreed that any disputes would be litigated there,” The Deal’s Scott Stuart writes.
The lending syndicate includes Deutsche Bank Securities Inc., Credit Suisse Securities LLC, Morgan Stanley, Wachovia Bank and Royal Bank of Scotland plc, according to the deal. All could be sued along with Citi.
Update: It’s on. The Wall Street Journal just reported that the two lawsuits have been filed.
Clear Channel, PE firms poised to sue lenders over buyout [The Deal]

  • 21 Feb 2007 at 9:04 AM
  • CEO

Who Will Run Univision?

The bidding war for the Spanish-language television network Univision was one of the greatest private equity stories of last year. Now the winners of that auction–including, Thomas H. Lee Partners, Texas Pacific Group, Madison Dearborn Partners, Providence Equity Partners and media mogul Haim Saba–are on the hunt for a CEO. Choosing the right man to run a company is one of the things that private equity firms pride themselves on doing very well. According to the New York Post, the owners of Univision are very close to naming their man.
The announcement is expect in a week or two, and despite rumors it seems unlikely that Univision will be run by former Mexican president Vincente Fox. So who is going to run Univision?
From the Post

Univision is viewed as having strong talent internally, including current CFO Andy Hobson and President Ray Rodriguez.
But Univision’s new owners are believed to be looking for a high-status bilingual exec with close ties to Mexico.

Leave your best guess in the comments section below. No points for answering “George W. Bush.” He has other commitments until at least 2008.
Univision Narrowing Search For CEO

Planespotting

GV.jpgA reader writers:

I was indulging in some internet planespotting and noticed that at 8:49 AM MDT (this morning) a Gulfstream IV registered to Thomas H Lee Management arrived at Centennial, a small, general avation airport outside of Denver; less than two hours later at 10:44 a Gulfstream V registered in part to SAC Capital Advisors arrived. No idea what it means but looks really coincidencey to me.

Well, there’s one obvious conclusion to infer: SAC has better private planes than Thomas H. Lee. Also, the brunch at Ellyngton’s is fantastic and wholly worth the hop/skip/flight over.
As for what else is happening in Denver: MorganStanley’s looking at TransMontaigne, but nothing else comes immediately to mind. Any other info? Send to tips AT dealbreaker dot com. Update: A reader points out that there are Janus takeover rumors circulating at the moment.

“There Was a Discrepancy With Reality”

The Festus and Helen Stacy Foundation has filed a claim charging TH Lee Putnam Ventures and Merrill Lynch Alternative Investments with inflating the valuation of their portfolio in reports to limited partners:

For example, even though 11 of the 37 companies that TH Lee Putnam had financed were shut down or had been written off completely, Merrill Lynch disclosed in its performance reports that the remaining 26 companies retained 91.8% of their value, the foundation’s claim says. Wendell Bird, the attorney representing the Stacy Foundation, said it’s unlikely that those 26 companies would be performing so well, while the other one-third were worth nothing at all. “There was a discrepancy with reality,” said Bird…

Maybe we’re cynical but we always assumed VC portfolios were inflated post-boom. We used to multiply total value by a percentage and refer to it as the “Limited Partner Discount Rate.”
At any rate, “there was a discrepancy with reality” is the best thing we’ve heard all week.
Says The Accidental Consultant:

It is not just the Private Equity firms that have an interest in inflating values. The largest clients of the PE firms do as well.

[DJ/VentureWire via The Accidental Consultant]