Market Not Buying Recent Buyout Deals
from the about-that-offer... dept
It's easy to forget that just because a buyout has been announced, there's no guarantee that it will actually go through. Pending private equity deals are particularly vulnerable at the moment, because they're all debt financed. One good way to get a sense of whether the market is expecting a given to go through is to look at the current market price of a stock compared to the buyout price. The wider the gap, the less likely it'll actually happen. These gaps are getting pretty wide on a number of deals, including a few discussed here. The purchase of Clear Channel was announced last November, but today the stock trades at 37% below the offering price. Alltel is in a similar boat, trading 22% below the buyout price, which was just announced in May. It's still possible, of course, that both of these deals will get done. But if current conditions persist, we may see them hang around in their current form for a bit longer.Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
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Filed Under: m&a, private equity
Companies: alltel, clear channel
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Circuit City
but never assume anything...because some people are idiots and will never do the intelligent thing and others are biding their time not realizing they should have bought stock a long time ago. (Apple anyone?...who bought stock at $14 a share a few years back and kept it?)
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Isn't buyout price ALWAYS higher than trading pric
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Clear Channel Buyout
Maybe if such a breakup were to occur we would see real local news with divergent opinions again with the result being an informed public again.
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