DealBook: Carlyle Capital on the Verge of Collapse

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Edited by Andrew Ross Sorkin

TODAY'S TOP HEADLINES | Thursday, March 13, 2008 M & A: Electronic Arts Starts Tender Offer for Take-Two BANKING: Regulators May Raise Scrutiny of Banks' Capital PRIVATE EQUITY: Apollo's $1 Billion Bet on Distressed Debt HEDGE FUNDS: Drake May Liquidate Its Hedge Funds OFFERINGS: House Bill Could Cast a Cloud Over Visa I.P.O. VENTURE CAPITAL: Kawasaki Launches New Media Start-Up LEGAL: Another Societe Generale Trader Is Held TOP STORY Carlyle Capital on the Verge of Collapse Carlyle Capital, an affiliate of private equity firm Carlyle Group, said on Thursday it was in default on margin calls of over $400 million, and said its lenders would likely take possession of its remaining assets. Carlyle Capital said it was unable to meet its margin calls and was now in default on about $16.6 billion of its debt. "The remaining indebtedness is expected soon to go into default," Carlyle Capital said in a statement. Fears that more private equity groups, hedge funds and mortgage lenders are struggling with their financing are putting heavy pressure on global equity markets, which have tumbled in recent months on fears of a U.S. recession and the growing fallout from a global credit crunch. Go to Article from Reuters via The New York Times» Go to Article from Bloomberg News» Read More Add a comment ADVERTISEMENT Back to Top MERGERS & ACQUISITIONS Electronic Arts began a $2 billion tender offer for shares in Take-Two Interactive on Thursday, officially marking a hostile effort by the videogame giant to acquire the maker of the Grand Theft Auto series of games. Go to Item from DealBook» Go to Electronic Arts Press Release via Business Wire» Go to Article from Reuters via The New York Times» Read More Add a comment The discount retailer Target said on Wednesday that it was in talks with an investment partner to sell an undivided interest in about half of its credit card receivables for about $4 billion. Go to Article from Reuters via The New York Times» Go to Article from Bloomberg News» Go to Article from MarketWatch» Read More Add a comment The latest in a spate of deals for virtualization start-ups is Microsoft's acquisition of Kidaro, an Israeli developer of desktop virtualization software for enterprises. Go to Article from The Deal.com» Read More Add a comment Yahoo's upcoming first-quarter earnings are generating lots of anticipation. Some have even suggested that weak results could create an opening for Microsoft to lower its takeover bid. Go to Article from Silicon Alley Insider» Go to Article from All Things Digitial» Go to Article from from Seeking Alpha» Read More Add a comment CRH, the world's second-biggest maker and distributor of building materials, agreed to buy Texas-based Pavestone Group for $540 million in cash to expand in concrete landscaping products. Go to Article from Bloomberg News» Read More Add a comment Back to Top INVESTMENT BANKING Treasury Secretary Henry M. Paulson Jr., Federal Reserve Chairman Ben S. Bernanke and other U.S. regulators will propose tougher scrutiny of banks' capital in a report on lessons from the mortgage crisis, according to The Los Angeles Times. Go to Article from The Los Angeles Times» Read More Add a comment Jumping into the are-we-aren't-we-in-a-recession debate, JPMorgan Chase Chairman and Chief Executive James Dimon told a group of economists in Washington on Wednesday that the U.S. is likely in recession already and the housing market is expected to deteriorate further. Go to Article from Reuters via The New York Times» Read More Add a comment Bear Stearns chief executive Alan D. Schwartz, appearing in an interview on CNBC, dismissed the recent speculation about the potential for a cash crunch at the investment bank. Go to Item from DealBook» Go to CNBC Video via The New York Times» Read More Add a comment Bear Stearns chairman James E. Cayne bought a $25.8 million apartment at one of New York's hottest new addresses, the Plaza. Go to Item from The New York Post» Go to Item from DealBook» Go to Item from The New York Observer» Read More Add a comment Back to Top PRIVATE EQUITY Apollo Management, the private equity firm run by Leon Black, is investing $1 billion in distressed debt, Bloomberg News reported Wednesday citing a letter sent to investors. Among the bonds Apollo will invest in are those issued by companies it owns. Go to Article from Bloomberg News» Go to Item from DealBook» Read More Add a comment Stephen A. Schwarzman, the chairman and chief executive of the Blackstone Group, received $350 million in compensation in 2007, making him one of the highest paid executives on Wall Street. Go to Article from The Associated Press via The New York Times» Go to Article from Bloomberg News» Read More Add a comment Back to Top HEDGE FUNDS Drake Management, the New York based-firm started by former BlackRock money managers, told investors on Wednesday it is considering liquidating all three of its hedge funds, including its largest, the $3 billion Global Opportunities fund. Go to Article from Reuters» Go to Article from Bloomberg News» Go to Article from MarketWatch» Read More Add a comment Blue River Asset Management's main municipal-bond hedge fund is liquidating, but Blue River has raised about $110 million from investors to open a new domestic fund, Reuters reported. Go to Article from Reuters» Go to Article from The Financial Times» Read More Add a comment GO Capital Asset Management temporarily halted redemptions from its Global Opportunities Fund, in what Bloomberg News said was "at least the seventh hedge fund in the past month forced to take steps to protect itself from market fluctuations." Go to Article from Bloomberg News» Read More Add a comment Back to Top I.P.O. / OFFERING As Visa prepares to launch its $19 billion initial public offering next week, Washington is mulling a move that may put a significant dent in the rosy outlook of what is expected to be the nation's largest I.P.O. in history, The New York Post reported. Go to Article from The New York Post» Read More Add a comment J. Crew Group's stock price has more than doubled since its July 2006 public offering, offering proof that buyout-backed stock sales can enrich publish shareholders as well. Go to Item from DealBook» Read More Add a comment The Blackstone Group has picked up a minority stake in Titagarh Wagons, an India-based railway freight wagon manufacturer, for 672 rupees per share in a pre-I.P.O. placement, The Economic Times reported. Go to Article from Thomson Financial via CNN Money» Go to Article from The Economic Times» Read More Add a comment Back to Top VENTURE CAPITAL Guy Kawasaki, Apple's former mega-evangelist and well-known Silicon Valley entrepreneur, announced on Tuesday the launch of his second media start-up, Alltop. Go to Article from the Red Herring» Read More Add a comment San Francisco based WeGame, described as a "YouTube for gamers" seems to be off to a solid start since launching last month. Go to Article from TechCrunch» Read More Add a comment Jossip Initiative, the company that owns the, mediacentric Website jossip.com and other ventures, is on the block, The New Post reported. Go to Article from The New York Post» Read More Add a comment Azure Capital Partners and Bridgescale Partners said they acquired NeoNova Network Services, a rural Internet service provider, for an undisclosed price. Go to Article from Tech Journal South» Go to Item from PEHub.com» Read More Add a comment Back to Top LEGAL Authorities took a second employee at the French bank Societe Generale into custody on Wednesday in connection with a trading scandal that the bank said had cost it nearly 5 billion euros (more than $7 billion). Go to Article from The New York Times» Read More Add a comment The first hint of drama in the dispute between John C. Malone's Liberty Media and Barry Diller's IAC/InterActiveCorp came on Wednesday, the third day of a trial that turns on whether Mr. Diller's plan to split IAC into five companies can survive a challenge by Mr. Malone. Go to Article from The New York Times» Read More Add a comment David Sokol, widely considered among the top candidates to eventually replace Warren E. Buffett as chief executive of Berkshire Hathaway, announced on Tuesday that he plans to step down as chief of Berkshire's utility unit, MidAmerican Energy Holdings. He will remain chairman. Go to Article from Reuters via The New York Times» Go to Article from The Omaha World Herald» Read More Add a comment Activist shareholders are stepping up their use of the Web to push for change at companies, and recent proxy rule changes may speed the trend, according to Compliance Week. Go to Article from Compliance Week» Read More Add a comment Liechtenstein has issued an international arrest warrant for a man suspected of selling stolen banking data to German authorities that formed the basis of a vast tax evasion scandal. Go to Article from The New York Times» Read More Add a comment Get home delivery of The New York Times for as low as $3.15 a week.

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