Bizwatch

Attack of the Locusts!
Not long ago, going public was the hottest move a company could make. These days, it's going private. Private equity funds are soaring worldwide, particularly in Europe, where the value of buyouts rose by 23% last year to €80 billion, according to the U.K.-based Centre for Management Buy-Out Research, and seems likely to keep rising. Not everyone likes the trend; German officials have likened the firms to "locusts." But U.S. funds alone have trebled their investments in Europe over the past four years. Many of them are currently raising huge war chests for further acquisitions.

They include Goldman Sachs, which last month raised a further $8.5 billion, and the Blackstone Group, which the Financial Times reported last week was planning a new record-breaking $11 billion fund. Indeed, private equity has become such a force that the mere rumor of a forthcoming deal can have a huge impact on stock prices. Shares in Whitbread, the British brewing and restaurant firm, jumped by almost 9% last Thursday on speculation that several private equity firms are circling. The stock dropped back again a bit on Friday; the company didn't comment.

Why the flurry? Private equity funds typically oversee big management and strategic changes after a buyout, including closing down or dumping money-losing assets. But they're not long-term owners; they usually hope to sell their holding for a profit after four to five years.

Many public firms have grown weary of the bureaucracy and expense required to keep regulators satisfied. And Mark Pacitti, a corporate finance partner at consultants Deloitte in London, notes that "private equity will make the difficult decisions that established [public] companies may be reluctant to do." Such cold-bloodedness is what evokes the "locust" comparison; so far, though, that hasn't been bad for business. — By Peter Gumbel

Leapfrogging Rock Stars
When British rockers Coldplay released the first track off their new CD last week, you could almost sense the relief at record label EMI. Chairman Eric Nicoli partly blamed a 13% dip in annual profits on the delay of the group's latest album. All the more irritating, then, that Crazy Frog's Axel F, mixing the theme tune from the Beverly Hills Cop movie with an infuriating mobile-phone ring tone — think two-stroke scooters voiced by an animated frog — outsold Coldplay's single fourfold last week, according to music retailer HMV. Exploiting the Crazy Frog's appeal (the ring tone is sold across Europe, the U.S. and Australia), the track looks set to top the British singles chart this week, a first for a ring tone.

That "might be a little embarrassing" for Coldplay, admits HMV spokesman Gennaro Castaldo, but it's a hit with Jamster!, the Berlin-based mobile-phone entertain- ment firm that's already earned millions in Crazy Frog ring-tone sales. Jamster!, which is owned by U.S. software firm VeriSign, receives a slice of sales of the CD single, due for release in France this week. Will ring tones soon regularly outsell rock stars? Do the French like frogs' legs? — By Adam Smith

The Bottom Line
	Any place where there are more than 50 investment bankers per square foot is a great place to be.
		BRENT HOBERMAN, CEO of lastminute.com, on networking at the Chelsea Flower Show, an event popular with the U.K. business élite