In a hilarious piece that exposes the hypocrisy of the disastrous Blackstone Group (NYSE: BX) IPO, MarketWatch's David Weidner suggests, tongue planted firmly in cheek, that KKR should make a run at acquiring Blackstone. According to Weidner:
Blackstone is inefficient. It will pay nearly $400 million of Schwarzman and other managers' taxes during the next decade. Its IPO has generated a political backlash that could end up doubling its tax rate, and the firm expects "significant losses" during the next few years as it absorbs compensation costs and amortizes its good will, according the firm's prospectus.
But the corporate governance structure at Blackstone would make any kind of takeover impossible. Its size and the crumbling credit market also make any deal nothing more than a dream. But still, for geeks like us at BloggingBuyouts, this is the kind of thing we dream about. It's like private equity fan fiction!
But the Blackstone IPO is bogged down with irony: These firms ostensibly create tremendous value by running lean operations where everyone is accountable to the owners -- and yet Blackstone's management could hardly be called accountable to its public shareholders.
Blackstone will probably continue to drop further, but it's still a stock to avoid.
