Which “US Entity”?

The UAE’s state-owned company DP World said yesterday it would acquiesce to political pressure in the US and transfer the controversial ports in the Dubai deal to a US-owned entity. A US entity with ties to the Bush/Saud dynasty maybe? A US entity with ties to the UAE? How about The Carlyle Group, or Halliburton? How about a newly formed entity whose operating officers are all members of WHIG? If I sound like I don’t trust the White House and the UAE, it’s because I wouldn’t walk three feet with representatives from either of them without having an armed guard. If the Dubai deal goes to a newly formed entity, thrown together for the express purpose of ending the controversy on this dubious Dubai deal, you can bet your ass it’s a front. If the entity is an existing company, you can bet your ass it’s been bought and paid for by the White House in cahoots with the UAE. The UAE, remember, promised reprisals against the USA if the ports deal fell through. DP World, remember, said on March 7th that in a few days P&O’s operations would belong to them, no matter what Congress does. I believe the UAE when it makes threats. In a pig’s eye the deal has fallen through. The deal has simply been made to look like it has fallen through. The three “US entity” frontrunners are: The Blackstone Group, a private equity concern, The Texas Pacific Group (TPG) another private equity outfit and Kohlberg Kravis Roberts (KKR) which specializes in leveraged buyouts. As we speak, Blackstone and TPG both are bidding for Univision, the largest Spanish-language television and radio company in the United States. An interesting tidbit about TPG is that The Wall Street Journal reported that one of its founders, David Bonderman, supported John Kerry in the last election, but was a George Bush supporter in 2000 and also supported GWB when he ran for Texas guv. Definition of private equity from the Investor Dictionary: Private equity is a broad term that refers to any type of equity investment in an asset in which the equity is not freely tradable on a public stock market. Categories of private equity investment include leveraged buyouts, venture capital, growth capital, angel investing, mezzanine capital and others. Definition of leveraged buyout from the Investor Dictionary: A leveraged buyout (or LBO) occurs when a financial sponsor gains control of a majority of a target company's equity through the use of borrowed money or debt. Typically this money is borrowed through a combination of prepayable bank facilities and/or public or privately-placed bonds, which may be classified as high-yield or junk bonds. Often, the financial sponsor will use the target company's free cash flow to repay the borrowed debt. Finally, the financial sponsor will sell the target company to another company, sell shares in an IPO or pay itself a dividend payment in a refinancing. Most leveraged buyout firms look to earn a return on investment in excess of 20%...Proponents of LBOs claimed that they caused companies to make more efficient use of their resources. Opponents claimed that they tended to destroy value and cause great economic hardship through the economic disruptions they caused. So what we’ve got here is this: mavens and pundits in the field of high finance are betting that the Dubai deal is turned over to an entity that preys on corporations that are in trouble, rapes them, sells them to the highest bidder, makes an inordinately high profit and causes distress and hardship wherever it goes. Perfect.