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Big Lots Inc. Message Board

  • paulliu Mar 16, 2011 4:48 PM Flag

    Bloomberg Report

    According to Bloomberg at my work, Thomas Lee and Bain are ready to submit bids for the first round. TPG, Blockrock and a Japanese co. calls Fast Retailing also interested but not sure if they will submit any bids.

    Goldman is looking to sell BIG at EBITA between 10.5 to 11 which indicates a price close to $60.

    Anyone with Bloomberg can see the news.

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    • thanks....good info.....!

    • One at a time:

      1) Goldman is orchestrating the auction.

      2) Goldman is the primary contact for the bidders, but the bidders are granted limited direct access to management.

      3) Each bidder signs an NDA and each bidder agrees to a written set of groundrules for the auction.

      4) There are inevitably converstations amongst certain bidders regarding joining forces. Those conversations are typically discouraged until later rounds of bidding.

      5) As was the case at JCG, management sometimes holds personal conversations regarding their respective involvement in the buyout with one or more bidders. In this case, we do not know what if any role management played in initiating the discussions.

      6) Different sets of circumstances dictate the degree of disclosure that takes place. In this case, BIG management appears to have been counseled that no disclosure is required. Given the non-disclosure to date, I would not expect any disclosure until a DMA has been executed.

      7)Once an auction has taken place, it would be quite unusal for a "bidding war" to ensue. Anyone who wanted to bid already had their chance.

    • well, there are two interested parties as of early Feb. I do not have their names in front on me. BIG hired Goldman to explore BIG's options. So, is Goldman doing the transmission of information between BIG and the two parties, all the while it is being kept private? Or are all parties meeting together behind the scened? I read somewhere that a Japanese company might like to own a retailer in the U.S.A.
      How many players do you think are out there?
      Will the auction most likely stay private until BIG accepts the one most favorable to shareholders?
      Some takeover stocks go higher than the publicly offered price due to speculation that higher bids may come from others.
      Who usually makes the first move?
      Could the two interested private equity firms team up and make a joint offer?
      Any info you have will be appreciated and informative.

    • I used to be an M&A investment banker. What exactly would you like to know about the auction process...which by the way, I believe is ongoing right now...not "down the road" as you suggest.

    • If high 30's was the downside, then good.
      The stock was barely over $27 back in late Dec.
      It's up 50% since then.
      Anyone with opinions on how an auction process would go? (hypothetically assuming there is one down the road)

    • OK, if you say so.

      However, if that's the case, I doubt that either strike would offer you much protection. First of all, since rumors of a buyout first surfaced (and the stock traded in the low $30's), BIG reported spectacular earnings and gave great guidance. Second, even if a buyout did not materialize in the near term, the buyout calculus is out of the bag and would have a lingering and positive impact on BIG's valuation. What I'm saying is that if BIG announced today that it was not engaged in any discussions or undertakings with respect to a buyout (something it is very unlikely to do...even if it's true), the shares would only retreat into the high $30's.


    • what are they waiting on?
      Tell me the reasons to wait........
      lower stock price to make $60 look REAL BIG?
      I bought the stock at $42.45 and also have July $50 calls. I'm now forced to buy some October $35 puts as the stock is drifting lower. You can get 10 of the July $50 call options and control 1000 shares, for, about $0.80, or $800. If the deal happens at $60 you make a profit of $9200. No deal by July 15th, you lose your $800 investment. A deal at $53 is still a profit of $2200 or almost 300%.

    • Lind, Please forward the email to me. Thanks.

    • Yo Lind:

      One more?

      Thank you in advance. Still on vaca so will read this later.

    • Lind, Thank you.

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