Blackstone working on higher Gates offer -sources

Tue Mar 18, 2014 5:57pm EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Soyoung Kim and Greg Roumeliotis

NEW YORK, March 18 (Reuters) - Blackstone Group LP is working on a higher takeover bid for industrial conglomerate Gates Global Inc after its previous offer of roughly $5.5 billion was turned down by Gates' owners last week, people familiar with the matter said on Tuesday.

Blackstone, which submitted its binding offer in partnership with TPG Capital LP on Wednesday, is in negotiations with Gates' owners - Onex Corp and the Canada Pension Plan Investment Board (CPPIB)- about raising its bid to clinch a deal for the auto parts and building products maker, the people said.

It remains unclear whether TPG will agree to join Blackstone in the deal at a higher valuation, one of the people said, cautioning that the negotiations were ongoing.

While Onex and CPPIB are also weighing an initial public offering of Gates in a so-called "dual track" process, they are leaning toward a sale and are working to finalize a purchase agreement, the people said.

If final terms are agreed, a deal for Gates could come in the next two weeks, the people said. It would mark the second largest private equity deal agreed so far this year following Cerberus Capital Management LP's $9.4 billion merger of its Albertsons supermarket chain with Safeway Inc, which was announced earlier this month.

All the people asked not to be identified because the matter is confidential. Representatives for Blackstone, TPG and CPPIB declined to comment, while Onex and Gates did not immediately respond to requests for comment.

Previously known as Tomkins Plc, Gates filed for an IPO in December, more than three years after it was taken private for $5 billion in 2010.

Reuters first reported in November, citing people familiar with the matter, that Onex and CPPIB were seeking to hire banks to explore both an outright sale of Gates to another company and a public offering.   Continued...