What's next? Microsoft? Interesting perspective from a guy down under.
AS leveraged buyouts go, the recently announced $US33 billion deal ($43.42 billion) to buy HCA, the US hospitals group, is rated the biggest ever. Now, NTL, the heavily indebted European cable group, looks set to go the same way for an eye-popping $US20 billion.
With private equity investors gobbling up bigger and bigger chunks of the corporate world, fuddy-duddies worry that quoted equity will shortly become extinct. The usual party-poopers see a bubble and warn that hubris will soon lead to nemesis. For them, over-ambitious private equity folk deserve their status, shared with hedge funds, as the new bogeymen of the western world.
They have, of course, got it all wrong.
microsoft would present many opportunities to increase cashflow, since they are known as a firm that takes on extra expenses just to smooth earnings growth, however:
journalist thinks he can get 15 times EBITDA in debt. jeez, is his background RE or what...
with an equity check at a very minimum of say 10%, maybe 30-35B including takeover premium, you'd need the top 30-40 funds in the world or so to team up for this deal. how likely is this to happen...
with powerful shareholders/management like bill, steve and paul who don't need any money and will very likely oppose a deal, this one will have to go hostile. this alone kills any prospects of this happening...
http://blogs.zdnet.com/Ratcliffe/index.php?p=170
Fun idea over a few beers, just not possible... very interesting article in FT though.
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