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Not that anyone cares, but the COVID-19 pandemic has been pretty rough on the private equity industry. Not only can it not wrangle a bailout dollar, it can’t even sell anything right now. And that means firms are stuck with a lot of positions that are taking a bath: KKR lost $1.3 billion, Blackstone $1.1 billion, Apollo $996 million, Carylyle $612 million.

If there was a silver lining in this, it was that they were able to walk away from what had become future money-losing opportunities, like Sycamore Partners did with Victoria’s Secret. Unfortunately, this cuts both ways, a lesson Dan Loeb is teaching Silver Lake Partners and Partners Group.

Blank-check company Far Point Acquisition Corp on Thursday urged its shareholders to vote against the $2.6 billion deal to buy Global Blue after disruptions caused by the COVID-19 pandemic hit operations of the shopping tax refund firm…. Companies like Global Blue, which rely on international tourists who use its network to purchase luxury goods tax free, have felt the heat as travel restrictions and coronavirus-led lockdowns across the world keep people indoors.

That is, please vote against this deal that we made and that is our only reason for existing.

Global Blue warned that rejecting the deal could lead to the liquidation of Far Point, according to its charter.

That seems to be OK with Far Point, because disappearing would be a far, far better thing than to be involved in whatever business Global Blue is in, which is to say, at the moment, none. And Far Point will keep fighting even if its shareholders for some reason decide to vote in favor of a deal that its own leadership thinks is now a disaster.

“There is a likelihood that Global Blue will lack sufficient capital and liquidity to fund its operations and satisfy its financial obligations following the closing of the transaction,” the company said in a statement…./If the transaction, which was announced in January, is approved by its shareholders, Far Point said there remains a risk that one or more conditions to the deal closing would remain unsatisfied./That would include a trigger of clauses such as the material adverse effect (MAE) and would raise concerns about Global Blue’s ability to meet New York Stock Exchange listing rules.

Fingers crossed on those!

Dan Loeb’s Far Point urges investors to scrap Global Blue buyout [Reuters]
Private Equity, Lobbying the U.S. for Help, Is Mostly Hearing ‘No’ [NYT]
Victoria’s Secret Sale to Private Equity Firm Fall Apart [NYT]


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