New Page 2

TPG & Apollo

Learn more about private equity investors.

This is very important reading material.

Fasten your seat belt!

We are in for another rough ride.

Who is going to legally represent you and fight against this?

~~Harrah's~~ "Caesars Entertainment" executives?

They must follow TPG's orders!

There is no denying one simple fact: the current owners of Harrah's are not in this for the long haul. Typically, private equity investors hold a company for 3 - 5 years. Layoffs are common during their short ownership of a company. Private equity investors are basically there for one thing, and one thing only: massive short-term profits. The local layoff announcements have started already. READ #70

Learn everything that you can about private equity investors before putting your faith in our employer who has zero casino experience and does not intend to stay around as long as most Dealers have.

Following are article excerpts with links (colored text).

Private investors and public companies did a lot of acquiring in 2006 and will be looking for quick profits. The easiest way to do that is to downsize the work force...

The ultimate need for a profitable exit strategy also argues for layoffs as a result of the private equity boom of 2006. Private equity investors get their money back -- and produce their profits -- when they sell the company they've purchased to another buyer. Most often that buyer is the public market.

Here's the process: Buy the company, rearrange the assets, rejigger the finances and put as much lipstick on the pig as is necessary so investors in the public market will pay a high price for the shares in an IPO (initial public offering).

- - - - - - - - -

"Furthermore, private equity investors are laser focused on generating short-term returns and the only way to accomplish that goal is to slash costs by cutting back on service and eliminating jobs. "

- - - - - - - - -

Portland General Electric

TPG has lost at least one deal because of the risks posed by its management approach. In 2005, the Oregon Public Utility Commission rejected TPG’s bid for Portland General Electric, citing debt burden and quick flip as major risks of the deal. In addition, internal deal documents leaked to the press revealed TPG’s plans for “wholesale layoffs and dramatic cuts in maintenance.”

Here is another source on this topic:

A Jan. 5 article in Willamette Week brought to light a set of secret plans for major layoffs at Portland General Electric (PGE) if Texas Pacific Group (TPG) wins approval of its bid to buy the utility...

"TPG plans to sell PGE again within five years. In that time, it plans to slash PGE’s operations and maintenance budget, lay off as many as 120 of PGE’s 467 customer service workers, cut information technology and human resources spending by as much as $10 million a year, reduce officers and high-level managers, reduce PGE’s $180 million budget for routine capital expenditures by $15 million, and cut overhead (employees) as much as 50 percent at its Beaver Plant in Clatskanie."

- - - - - - - - -

~~Harrah's~~

"Caesars Entertainment"

This is from Jan. 30, 2007, the month following the private equity announcement.

Harrah's Entertainment eliminated some 200 jobs in its Las Vegas corporate office Friday, saying the layoffs have nothing to do with the planned $27.8 billion leveraged buyout of the casino operating giant by two private equity groups.

Harrah's, as directed by TPG/Apollo, backed out of two major projects.

[Jan] Jones said the timing of the Slovenia and Bahamas withdrawals was coincidental and not a cost-cutting measure related to a recent buyout of Harrah's by a pair of private-equity firms.

The name of the company itself is being changed.

Harrah's chairman Gary Loveman says the name change will give the company greater prestige and more international name recognition.

[Mr. Loveman neglected to mention greater resale value when TPG/Apollo sell]

Read #70 about TPG/Apollo closing the Harrah's Minden call center.

TPG/Apollo laid off all Dual Rates at Caesars Palace.

- - - - - - - - -

J. Crew

In a terse May 1 press release, J. Crew Group reported that CEO Mark Sarvary left the company that day “by mutual agreement.” But Sarvary's departure was apparently one of many: The New York Post, quoting an unnamed source, reported that 100 employees — about 25% of the staff at the apparel cataloger/retailer's New York headquarters — were laid off that same day.

"Texas Pacific Group (TPG), J. Crew's majority shareholder, wouldn't comment. But another source familiar with the company confirms the layoffs."

- - - - - - - - -

Petco

In July 2006, TPG and Leonard Green acquired Petco for a second time, in a $1.8 billion deal. Days after the acquisition, Petco shareholders filed a class action law suit claiming “self-dealing and breach of fiduciary duty” in the Superior Court of California. The plaintiffs charge Petco with blocking a $33/share offer by PetSmart, and entering into a $29/share deal that benefits Petco management and the buyout funds at the expense of shareholders. The case is pending.

- - - - - - - - -

Apollo

For one, private equity is relentlessly focused on the bottom-line, and often seeks to cut costs rather than grow revenues...

Whenever Apollo executives visited, they "made a beeline for the accounting department," says former Chief Executive Robert Clark, who ran it for a year after the purchase. When he tried to discuss marketing, their "eyes would glaze over."

- - - - - - - - -

Short-Term Owners

Leon Black, Apollo, $4 billion, 82nd wealthiest American

David Bonderman, TPG, $3.3 billion, 105th wealthiest American - "Texas" of TPG

James Coulter, TPG, $2.8 billion, 135th wealthiest American - "Pacific" of TPG

They will be selling ~~Harrah's~~ Caesars Entertainment within a few years.

That is how private equity works.

- - - - - - - - -

Other Links

>>> Meet Larry The Loophole! <<<

>> Video: "How the private equity buyout industry works" <<

>> Video: "Private Equity" <<

more lengthy literature:

>> A Workers' Guide to Private Equity Buyouts <<

An excerpt from page 11:

Private equity professionals have their eye on the exit from the moment they first see a business plan. An exit is the means by which a fund is able to realise its investment in a company - by an initial public offering, a trade sale, selling to another private equity firm or a company buy-back. If a fund manager can’t see an obvious exit route in a potential investment, then it won’t touch it.

- - - - - - -

>> Behind the Buyouts: Inside the World of Private Equity <<

An excerpt from page 33:

The buyout deals and money-generating strategies that are generating immense wealth for the private equity buyout industry and many of its investors can have harsh consequences for workers and the companies they buy and sell.

- - - - - - - - -

bold emphasis ours