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  • lmerc5698 lmerc5698 Dec 21, 2012 11:19 PM Flag

    If Deal is held up stock will drop to around $27-$28

    The debt is not a drag if this deal goes sour, it can simply be repaid or used for general corporate purposes.....stock buy back at the current price. This would repurchase 9m shares or about 20% of the outstanding and be an enhancement to the eps. Also the company pays taxes so the interest expense is tax deductible and the after tax cost will be largely offset by the increase in eps and ultimate equity value. Don't forget private equity today models deals based on a 20% irr which basically doubles equity value every 4 years....why would this be different if the company stayed public? In the short term the price may go down but the real value is there and will be realized....

    Sentiment: Hold