Sunday, November 4, 2012

Carlyle Seeks Carpet Subsidies

The Carlyle Group is considering a bid for British carpet maker Victoria, destabilized and marked down due to Board level infighting this past summer.  While Carlyle loves disequilibrium and buying key assets on the cheap, something more may be afoot.

Carlyle took over Brintons', another British carpet maker, by effectively calling their debt.  The Carlyle Group dumped Brintons' pension on the public in the prepackaged bankruptcy process.  

Carlyle wants major government subsidies to update its Brintons' carpet plant in Kidderminster, which happens to be home of Victoria.  Should Carlyle add Victoria might that improve its prospects for a major nondebt, nonequity capital injection, courtesy of taxpayers?  Nobody does government-corporate welfare better than the boys at Carlyle.

As for ethics, consider words of the Brintons' founding family:

The descendants of the founding Brinton family accused Carlyle of breaking a string of promises to gain control.
Fearless greed, it's the PEU way.