FIRST ROUND(2)

We at PEI sat out the heated debate that took place in some corners of the financial press about Stephen Schwarzman's 60th birthday party, held in New York last month. Internally, however, we did scratch our heads over the choice of music. Rod Stewart? Given that the head of a rival private equity firm (David Bonderman, TPG) once hired the Rolling Stones for his own birthday bash, we thought for sure that the CEO of Blackstone would have hired someone a bit more … rocking?

Then it hit us: Schwarzman, ever the strategist, was trying to send a message to corporate CEOs everywhere. A line-by-line analysis of the Stewart hit “Do Ya Think I'm Sexy” reveals what Blackstone was broadcasting. Please note this has not been fact-checked.

ROD STEWART LYRICBLACKSTONE INTERPRETATIONShe sits alone, waiting for suggestions…A company with attractive cash-flowattributes ponders strategic alternatives…He's so nervous, avoiding all her questions…Blackstone continues to feel its bid is superi-or due to certainty of closure and value…His lips are dry, her heart is gently pounding…Blackstone associates have worked throughthe night modeling potential returns, the tar-get company has delayed an earnings report.Don't you just know exactly whatA Blackstone representative declined tothey're thinking?comment on market rumours.If you want my body…If your company could benefit froma recapitalisation…And you think I'm sexy…And you feel Blackstone could provide value-added operating support and corporategovernance…Come on, sugar, let me know.Please indicate your interest to yourM&A advisor…If you really need me…If Sarbanes Oxley is proving burdensome…Just reach out and touch me…Blackstone can provide an attractive equityincentive structure…Come on, honey, tell me so…We'd be happy to make a presentation beforeyour board of directors…