- Summary: HCA (HCA), Kinder Morgan (KMI) and Aramark (RMK) are all being taken private this year, to the tune of $40 billion total. In each case, executives from the companies joined forces with private equity funds to buy the companies. What's in it for the executives? They get to keep running the companies and they get an equity stake as much as 10%. What's in it for the private equity funds? By working with the executives, they essentially guarantee that there will not be any competition to win the deal. For example, after HCA received its bid (from its executives), HCA's special committee placed restrictions on the other bidders and set a 50 day deadline for the competing bid. This can obviously lead to conflicts of interest - by stacking the deck in its executives' favor, shareholders are not necessarily getting top dollar for their shares.
- Comment on related stocks/ETFs: The stakes are huge here. HCA, Kinder Morgan and Aramark are number 2, 3 and 9 on the list of largest buyouts in history. Heading up the list - RJR Nabisco, of "Barbarians at the Gate" fame. The Kinder Morgan buyout is a stunning $13.5 billion reversal of fortune for Richard Kinder, who left Enron 10 years ago to start the company that bears his name
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