Corporate activism has also dominated the headlines - both for its high returns and high-profile activities. Experienced managers, including Dan Loeb of Third Point Management, Bill Ackman of Pershing Square Capital Management, and Robert Chapman of Chapman Capital were there to explain how it is done.
Last year Franz Munterfering, who then chaired the country's Social Democratic Party, compared private equity firms to locusts that "fall upon companies...devour them and move on." The comment was prompted by the news that The Blackstone Group pocketed US$3.5 billion after it had acquired Celanese, a German chemical company, and floated it on the New York Stock Exchange.
On something of a debugging mission, heavy p.e. hitters Henry Kravis of Kohlberg Kravis Roberts, Stephan Schwarzman of The Blackstone Group, David Rubenstein of The Carlyle Group, David Bonderman of Texas Pacific Group and Leon Black of Apollo Management have descended on the annual Super Return, a private equity conference, in Frankfurt, The New York Post reports.
The German chemicals company, the world's largest producer of acetyl products used in paints, coatings and lubricants, was spun off by parent Hoechst AG (now Sanofi-Aventis) in 1999. Despite 2001 sales of about $4 billion and $509 million of Ebitda, its stock was perennially undervalued, and every private equity firm that approached it was rebuffed by management or discouraged by its unique circumstance of having dual listings in the U.S. and Germany.
Still, with 84%, Blackstone could get access to Celanese's cash flow on which to issue all the debt, equity and IPO, creating a complicated, superholding structure on top of the Germany entity. "I've never seen anything which involved this much financial engineering in the chemicals sector, and I've been in the business since the early '90s," Bradley recalls.
Nonetheless, investors, already worried about Blackstone's quick flip on its $650 million LBO investment, criticized Celanese's IPO pricing, claiming it was overvalued.
But even with a price cut, Blackstone took out $800 million from the IPO. That's after recouping a $500 million dividend from a refinancing in August. Its remaining stake is valued at roughly $1.45 billion.
