Based on the preliminary numbers, private equity deals were down for the first quarter of 2007, according to a recent edition of PE Week Wire. “Moreover, private equity has actually lost global M&A market share, as total M&A volume is expected to top $1 trillion for the second consecutive quarter”—a first since the end of the year 1999. This data trend is at odds with the “consensus storyline” and perhaps forecasts that the hot PE market is cooling off.
Could increasing shareholder litigation be one cause? Although it’s now “commonplace” for shareholders to sue based on an alleged missed opportunity or flawed process (see our write-up of the Netsmart case in BVWire # 54-3), at least one buyout firm has now sued its acquisition target for choosing another buyer. The same PE Wire Week describes Apollo Management’s efforts to enjoin a buyout of EGL, Inc. by its CEO and two PE firms for $38 per share, saying that it willingly offered $40 per share. On March 27th, CEO of the buyer released a statement to “set the record straight,” but then four days later, an EGL shareholder filed another lawsuit against the company, according to a separate news report, claiming the $38 per-share price is “grossly inadequate.”
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