Blackstone Group weighing higher bid for Gates Global
19 March 2014
US private equity firm Blackstone Group is considering tabling a revised higher bid for auto parts and building products maker Gates Global Inc after its earlier offer was last week rejected by its owners.
Onex Corp and the Canada Pension Plan Investment Board (CPPIB), owners of Gates Global, had turned down a $5.5 billion takeover bid from a Blackstone and TPG Capital consortium.
Blackstone is in talks with Onex and CPPIB on raising its bid to seal the deal, but it is not clear whether TPG will agree to join Blackstone in a higher offer, Reuters reported, citing people familiar with the matter.
Gates Global is a leading manufacturer of power transmission belts and fluid power products for the automobile and other industries.
It manufactures and supplies power transmission belts, fluid products and other industrial equipment for customers such as Deere & Co, Daimler AG and Bombardier Inc.
The company posted $25 million in profits on sales of about $2.9 billion in the year ended September 2013, Gates stated in a filing for an initial public offer in December last year.
Gates Global has been working with banks on a sale or an initial public offer (IPO) to raise around $6 billion, and had filed for an IPO in December 2013.
Onex and Canada Pension acquired Gates Global in 2010 for about $4.5 billion, 10 years after London-based Tomkins Ltd acquired it in 1996.
A finalised deal would be one of the biggest private equity transactions in recent times after Cerberus Capital's $9.1-billion purchase of supermarket Safeway announced early this month (See: US supermarket chain Safeway in talks over possible sale).