From the Wall Street Journal this morning:
General Electric Co. has asked for bids on its plastics business, valued at as much as $10 billion, in an auction that appears to reflect new concerns from the Justice Department about the lack of competition among possible private-equity buyers.
GE has told a handful of private-equity firms contacted about the possible plastics-unit sale that they face restrictions on their ability to team up with other private-equity bidders, according to people familiar with the sale effort. Although the exact nature of the restrictions isn't known, one of the people said the contacted firms aren't allowed to call other buyout funds about teaming up.
The restrictions may effectively limit the formation of so-called clubs, the teams of two or more private-equity firms that pool their resources to pursue a single acquisition deal.
And over on Ideoblog, Larry Ribstein points out that this kind of auction-by-auction restriction is a far better solution than some fiat handed down by the federal antitrust authorities: "Why wouldn't this contractual approach beat one-size-fits-all banning of clubs? Or how about a default rule that targets could contract out of by setting bidding rules?"
GE Sets Private-Equity Limits [Wall Street Journal]
Private equity clubs and auction rules [Ideoblog]