For those of you who were worried that Goldman Sachs was the firm with no Achilles heel, fear not, for we have dug deep poked around the internet and found it: they don't play well with others.
The investment bank, whose private equity unit rarely bids alone, to avoid alienating the buyout firms that pay it lucrative deal advisory fees, has sent out a one-page “teaser” on General Electric’s plastics unit to potentially interested parties.
Goldman Sachs is understood to have imposed restrictions on the bidding process, which would make it very difficult for leading buyout firms to create their ideal consortiums. Private equity firms’ involvement in deals of this size is typically fluid in the early stages of the auction as they try different combinations before settling into rival bidding consortiums. Goldman Sachs is thought to be insisting that each party stipulates whom it is bidding with at the outset and sticks with that consortium until the deal is signed.
Goldman Sachs is thought to have one eye on a US Justice Department inquiry into alleged cartel practices among leading American buyout firms such as Kohlberg Kravis Roberts (KKR) and Silver Lake Partners. The inquiry, which came to light in October, is thought to centre on the possibility of collusion between private equity firms seeking to reduce the price that they pay for a company by teaming up for “club” deals.
Surprise at Goldmans manoeuvre to hamper bid rivals [Times Online]