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Graying tycoons get some satisfaction -- for $10-million

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By ROBERT TRIGAUX, Times Business Columnist

© St. Petersburg Times
published December 13, 2002


There are birthdays, and there are megabirthdays.

Financial guru David Bonderman, whose Texas Pacific Group controls a vast empire of businesses from Del Monte and retailer J. Crew to Largo's struggling telecommunications manufacturer Paradyne Networks, recently held an intimate celebration for his 60th birthday.

He invited 300 close pals to the Bellagio casino in Las Vegas, where comic Robin Williams personally entertained the group over dinner. Then the birthday bash headed to the Hard Rock Hotel and Casino, where John Mellencamp warmed up the party group with a 45-minute set before the piece de resistance: a private concert by the Rolling Stones.

If Mick Jagger crooned what a drag it is getting old, the lyric meant little to this graying group of overachievers.

Estimated party price? About $10-million with about $6.5-million reportedly going to the Stones. That's chump change to Bonderman.

"Taking Sin City excess to new heights," is how Las Vegas gossip columnist Norm Clarke described Bonderman's fete in a newspaper column last month. The party "may be the most expensive bash in Las Vegas history."

Such is Bonderman's indulgent world these days. Texas Pacific Group, a buyout firm that acquires struggling businesses, fixes them and typically sells them at a high profit, is on quite a roll.

This week, Fort Worth-based Texas Pacific Group is leading a consortium of buyout firms that looks to close soon on a $1.5-billion deal to buy Miami's Burger King Corp. from its parent, Diageo PLC. Texas Pacific agreed in July to a $2.26-billion buyout of the fast-food chain, but renegotiated the price sharply downward as Burger King's sales softened.

Earlier this week, Bonderman's firm was one of the major investors behind the initial public offering of California's Seagate Technology Holdings, a major maker of computer disk drives. The IPO was the biggest initial stock sale by a computer-technology company since Accenture Ltd.'s $1.9-billion offering in July 2001. Texas Pacific Group helped take Seagate private in a leveraged buyout in 2000, stands to make hundreds of millions of dollars in the IPO, and still will retain a sizeable stake in the company.

Texas Pacific, whose former stakes in Continental and America West airlines proved lucrative, even took a brief investment shot earlier this year at bankrupt US Airways.

All this success begs the question: What's happening to poor Paradyne?

The maker of DSL technology, which allows Internet access at high speeds over standard phone lines, Paradyne was a hot stock trading near $40 a share two years ago. But the DSL market has crumbled along with the larger telecom industry. Paradyne's stock now wheezes along between $1 and $2 a share. Cutbacks -- including layoffs this month rumored to top 100 people -- have become the unfortunate norm.

What will Bonderman do with Paradyne? He's not one to dump a once-promising business at a loss (though Bonderman got his money, and plenty more, out of Paradyne after Texas Pacific took the company public in 1999). Ahead, look for a lot more Paradyne belt-tightening and possibly an eventual sale when the DSL market and Paradyne's stock price improve.

Bonderman -- "Bondo" to his buddies -- shuns most publicity. He got a big break when Texas billionaire Robert Bass invited him to Fort Worth in 1983 to manage his fortune. With Bonderman's help, Bass took a stake in the privately owned Times Publishing Co., the parent of the St. Petersburg Times. That stake was eventually bought back by the Times for $56-million.

Texas Pacific split off from the Robert M. Bass Group in 1993.

Bonderman's 60th birthday was not the first time he has hired a major rock band. In 2000, to celebrate the closing of a $4-billion buyout fund, Texas Pacific rented San Francisco City Hall and hired the B-52s. But that was business, not personal. And the B-52s are not the Stones, said to be Bonderman's favorite band.

The trappings of Bonderman's 60th birthday party in Vegas caught Late Night comedian Conan O'Brien's eye. Of course, O'Brien joked on his TV show, Mick Jagger would play for aging business boomers. ... He needs to keep in touch with younger audiences.

Short takes

BOARDS OF PLENTY: Thanks to the post-Enron scare in boardrooms, corporate directors are harder to find and keep. St. Petersburg's Jabil Circuit has a remedy: pay them more. The electronics maker used to pay non-employee directors $5,000 per board meeting. Now Jabil will pay the same directors $30,000 a year, another $20,000 to the director bold enough to chair its audit committee, $10,000 to other audit committee members, $10,000 to the chairs of other board committees, and another $5,000 to directors sitting on any other Jabil boards

MERGER TALKS: Raytheon, which operates a substantial missile defense systems operation in St. Petersburg, held separate merger talks this year with General Dynamics Corp. and with Britain's BAE Systems, says a story in the Boston Globe citing unnamed sources. But Massachusetts-based Raytheon, confident of its economic bounceback, backed away from any possible deals

SHAREHOLDERS, 1. MOTHER NATURE, 0: Progress Energy, owner of Florida Power Corp., had its hands full in North Carolina last week trying to restore power to many of its customers whacked by a nasty ice storm. This week, Progress Energy saw fit to say it won't charge customers -- Floridians included -- for the unexpected multimillion-dollar repair bill. Nor did the hefty extra expenses deter Progress Energy this week from announcing an expected bump-up to the company's dividend. Even Mother Nature's wrath can't match that of utility investors deprived of their annually anticipated increase ...

-- Robert Trigaux can be reached at trigaux@sptimes.com or (727) 893-8405.

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