Hedge funds and Private Equity - PES

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214 Some difficulties can be expected over the next two years because of friction between cultures as the two companies merge. However, planned innovations and investments seem likely to be continued. For example, a new plant near Munich, producing pure gases for the semi-conductor industry, has recently been brought into operation. 2.4 Corporate governance and economics Although it was Linde that took over BOC, Reitzle emphasised that it is virtually a merger of equals. At the time of the take-over he was already cultivating the idea of it being a “friendly takeover”. He has brought two English managers from BOC onto the main board of the new company, which is being enlarged from four to five. Additionally it is rumoured, that BOC-director Tony Isaacs will be moving onto the supervisory board in 2007. The company will keep its headquarters in Germany and will remain an AG governed by German law. It will also continue to be subject to the German system of employee board-level representation – with 50% of the places on the supervisory board going to employee representatives – despite the fact that Reitzle had the possibility of moving to a company structure in which the German system would no longer have applied. 2.5 Protection of minority shareholders A take-over offer of 1,600p per share was made to all shareholders of BOC. 2.6 Management policies and shareholder activism: stock option programs, effects on board and CEO’s, management fees, employee information Under Reitzle the board of Linde has fostered good contacts with the representatives of the workforce and given them extensive information. This will be the same in the new company. 2.7 Effects on public finances Linde/BOC will continue to pay taxes to the German state. However, the company’s high level of debt will result in a sharply reduced tax bill. 3. LBO exit (secondary LBO, IPO, listing) Linde had been considering two ways to sell the materials-handling division (“Kion”): flotation on the stock exchange or a sale to a group of financial investors. On the 5 th of November 2006 Kion has been sold to a consortium comprising the private equity funds Kohlberg Kravis Roberts & Co. (KKR) and Goldman Sachs at a price of € 4 billion. The competition authorities approved the deal. KKR/Goldman Sachs say that they will honour all the agreements on safeguarding locations made by the Linde executive board with employee representatives. They want to pursue a strategy of growth to achieve sustainable increases in Kion´s value. The new owners plan to float Kion on the stock exchange in about 5 years in order to cash in on their investment.
References Süddeutsche Zeitung 09.06.05, p. 24; Frankfurter Allgemeine Zeitung 29.06.05, p. 12; Börsenzeitung 05.09.06, p. 13; Frankfurter Allgemeine Zeitung 22.09.06, p. 17; Financial Times Deutschland 19.10.06, p. 3; managermagazin11/06, p. 91ff.; Börsenzeitung 01.11.06, p. 11; Frankfurter Allgemeine Zeitung 01.11.06, p. 18; Handelsblatt 01.11.06, p. 17; Financial Times Deutschland 02.11.06, p. 10; Süddeutsche Zeitung 02.11.06, p. 28; Frankfurter Allgemeine Zeitung 02.11.06, p. 18; Handelsblatt 07.11.06, p. 21; Financial Times Deutschland 07.11.206, p. 1, p. 10; Börsenzeitung 07.11.06, p. 1, p.11; Handelsblatt 07.11.06, p. 1; Financial Times 07.11.06, p. 13; Financial Times Deutschland 17.11.06, p. 10; Börsenzeitung 23.11.06, p. 9; Frankfurter Allgemeine Zeitung 24.11.06, p. 18; Börsenzeitung 28.11.06,p. 9; Börsenzeitung 22.12.06, p. 10; Börsenzeitung 09.01.06, p. 9; Börsenzeitung 09.01.07, p. 9. Annex – 21 Case studies 215
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HEDGE FUNDS AND PRIVATE EQUITY A CR
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FOREWORD Since the 1980s the financ
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At the same time the PES Group took
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12 The need for long-term investmen
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14 1. Hedge funds and private equit
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16 In a very low interest-rate land
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18 The ECB has highlighted this cro
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20 in the sustainable development o
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22 Coherence, co-responsibility and
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24 Transparency in practise Some ar
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26 Ensuring more and better jobs An
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32 The first era of capitalism took
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34 1. Hedge funds In the following
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36 Hedge funds have a structure sim
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38 Hedge funds have flourished in a
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40 The European hedge fund industry
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42 Institutional investors Current
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44 - Funds of hedge funds (FOHFs) i
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46 If we assume US mutual fund indu
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48 the hedge funds themselves would
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50 management fees? It is a fact th
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52 These data notwithstanding, seve
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54 1.11. Tendency of crowding Despi
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56 Theory of money: “In modern ec
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58 Country France Italy Spain Subje
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60 Considering single strategy prod
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62 2. Private Equity Funds Private
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64 Buy-outs are typically majority
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66 2.3 The legal frame The investme
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68 What could you do with 72 billio
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70 And it highlights the comparativ
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72 The figures provide a substantia
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74 2.8 When targeting a company Whe
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76 Domicile of the fund The choice
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78 Specific economic function of Ve
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80 Mortgaging the future to capture
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82 Main conclusions: The total Euro
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84 3. The European response - curre
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86 Article 49 Within the framework
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88 The purpose of this Directive is
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90 As far as the hedge fund and Pri
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92 The following are regarded as se
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94 3. A Member State may entrust ma
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96 Article 93 The Council shall, ac
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98 Primarily, however, society must
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Social Europe versus capital market
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1. Economic viability of private co
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as a rule without any influence fro
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Here is a quite well known “flow
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2. Decent work and workers’ parti
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The pension funds of companies bein
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usiness plan for Kion to employee r
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The combination of increased indebt
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The EU has in the past tried to com
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3.1 The attractiveness of public ut
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fulfilment of public service respon
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The importance of Europe’s transi
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4. Employees, pension fund investme
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unit of Tremont Capital Management)
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contractual issues e.g. Lock-in per
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As many jurisdictions require benef
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Expert Group claims - with striking
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The rising number of hedge funds ap
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time peak in 2005.” It is importa
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Box 2: The Amaranth case (2006) In
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gies, size and age. For instance, i
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Box 3: Complex leverage arrangement
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force a hedge fund to default on it
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Private equity - especially in the
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finance infrastructure through long
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154 But if we in Europe - and hopef
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156 2. Market transparency - a comm
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158 Considering the fact that a lar
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160 Furthermore investment banks ar
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162 3.3 Transparency and supervisio
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Page 189 and 190: AA 1. Company description The Autom
Page 191 and 192: Autoteile Unger 1. Company descript
Page 193 and 194: Bulgarian Telecommunications Compan
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Page 197 and 198: DIS 1. Company description The DIS
Page 199 and 200: DT-Group 1. Company description DT
Page 201 and 202: share alternative. At that time the
Page 203 and 204: Frans Bonhomme 1. Company descripti
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Page 207 and 208: their relations with TPG and CSFB a
Page 209 and 210: Gate Gourmet 1. Company description
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Page 217 and 218: 2.3 Management policies and shareho
Page 219 and 220: would have unlocked hidden reserves
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Page 233 and 234: 2.3 Management policies and shareho
Page 235 and 236: from the tourism business, which is
Page 237 and 238: The consequences for jobs in Hambur
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Page 244 and 245: 244 Bond A debt investment with whi
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