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Lawsuit says buyout firms colluded on deals

Associated Press Modified: October 11, 2012 at 5:00 pm •  Published: October 11, 2012

Blackstone offered to pay $38 a share for Freescale on Sept. 10. The same day, KKR's group sent a note to Freescale mentioning a price of $40 to $42 per share. At the same time, KKR was also in the running to buy the hospital chain HCA. The plaintiffs say KKR had asked other private equity firms to back off from making a bid.

But after KKR showed interest in Freescale, Blackstone readied a bid for HCA, an apparent attempt to retaliate. The complaint alleges that executives at Blackstone and KKR then talked and decided not to compete against each other.

Once Freescale accepted Blackstone's bid of $40 a share, Hamilton James, Blackstone's president, sent an email to George Roberts, one of KKR's founders. "We would much rather work with you guys than against you," James wrote. "Together we can be unstoppable but in opposition we can cost each other a lot of money."

"Agreed," Roberts replied.

Although the complaint names a number of executives at Bain, it makes no mention of Mitt Romney, the Republican candidate for president and one of Bain's founders.

The court papers were released following a request from the New York Times.