UBS has launched legal action against its own clients, a joint venture of Terra Firma and Deutsche Bank, after they refused to allow the Swiss investment bank to sell debt relating to a buyout to their rivals.
UBS filed a complaint to London's High Court of Justice earlier this month citing breach of contract relating to a loan it provided to Autobahn Tank & Rast Holding, a road services business in Germany last year.
Terra Firma, run by buyout pioneer Guy Hands, bought Tank & Rast in 2004 in a deal worth €1bn. Deutsche Bank's pan European infrastructure fund Rreef then paid about €1.35bn for half of the group from Terra Firma last July. The deal involved Tank & Rast taking a €2.3bn credit facility, underwritten by UBS, as part of the financing.
After the deal completed, UBS set about syndicating the loan, but was blocked as the consortium balked at the prospective buyers of the debt. These are understood to include Macquarie, which lost out in an attempt to buy Tank & Rast last year.
It is understood that concerns were raised over a competitor and potentially hostile party buying into Tank & Rast's debt.
Borrowers of leveraged loans in Europe can prevent underwriters selling their debt, but are not allowed to withhold their consent "unreasonably". UBS is attempting to obtain an injunction claiming Tank & Rast's position is unreasonable and is seeking damages.
Spokesmen for UBS, Terra Firma and Deutsche Bank's Reef fund all declined to comment.