Carlyle, Singapore’s GIC Sued Over Collapsed AmEx Stock Buy

Carlyle Group Inc. and Singapore sovereign-wealth fund GIC Pte. are using fake excuses to renege on buying a 20% stake in American Express Global Business Travel, according to a lawsuit unsealed in the U.S.

A unit of Certares Management LLC claims Carlyle’s losses from the coronavirus left it with a whopping case of buyer’s remorse and prompted its attempt to scrap the stock purchase, which had valued the travel entity at $5 billion when it was announced in 2019. Certares leads a group of investors in the deal, including the Qatar Investment Authority and several Carlyle entities.

“The Carlyle Group’s losses do not provide defendants with a basis to withdraw from the transaction,” Juweel Investors Ltd., a subsidiary of New York-based Certares, said in the lawsuit unsealed Monday in Delaware Chancery Court. The investment fund “cobbled together a series of pretextual and transparently false excuses to justify their refusal to close” the deal, Juweel said.

The dispute is among a half-dozen busted-deal cases tied to Covid-19 that found their way to Delaware’s business court. The state is the corporate home to more than half of U.S. public companies and more than 60% of Fortune 500 firms. Chancery court judges hear cases without juries and can’t award punitive damages.

In its complaint, Juweel said Carlyle and GIC balked after the price of the deal rose when AmEx GBT sought to use a portion of the proceeds to cover operating losses tied to the pandemic. Juweel said the purchase agreement didn’t bar it from using the proceeds to fund its operations. The Certares unit also said it was prepared to close the deal under the agreed terms, according to court filings.