Best Buy Co. Inc. Message Board
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Let's do a little dividend math in case of buyout...
BBY has approx. 338 million shares outstanding. Annual dividend is $0.68 per share. That is about $230 million per year in dividend payments going out to share holders. Let's assume someone were to buy BBY and redirect that money toward debt service.
These are just guesses but 10 year bonds at 4% means $230 million could amortize just under $2 billion in debt.
Buyout price of $18 is about $6.1 billion total. Richard already owns 20% and won't be selling. Private equity needs to raise 80% of $6.1 billion which is $4.88 billion. The dividend savings will cover $2 billion of that price leaving only $2.88 B left for the private equity geniuses to figure out. A combination of debt and equity could cover that amount. If they can't figure it out then give me an hour or so with the financial statements and I can find a way. Even Fitch (in their downgrade) said BBY would generate nearly $300 million in free cash flow.
Getter done!!!Sentiment: Buy
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I repeat to those who say there is no buyout never was. You are plain wrong. Wrong. And wrong. Yes, the earnings are not great. Abysmal? No way. Remember, there was a hurricane Sandy which affected at least 15% if not 20% of Best Buy stores for 2! weeks. Nobody mentions it. OK. Second, current share price makes the buyout less expensive. It's evident. Third, Schultz has his own turnaround plan, it may be successful, may not be but it is different from that of from Joly.
- 1 Reply to ceo_john_chambers
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If BBY is in such bad shape, why haven't they cut or suspended the dividend?
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He will want a Slamdunk Bid thus the $20-$24 bid @a minimum
Sentiment: Strong Buy
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Yep, try to fool yourself until you end up in the soup line.
- 1 Reply to rene241972
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I don't really like soup. I was just doing a 60 second exercise using my MBA in Business Development and M.S. in Finance.
Sentiment: Buy
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dude, it is over with. there is no buyout. Everyone has backed out after this report. That is why they asked for extension to see how much damage occurs during the Christmas selling season.
- 2 Replies to john_lee_20032003
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Analyst consensus is that financing will be tough to come by with the current weakening of the business model. Not currently a growth/profit story. As long as margins are under duress, free cash continues to fall, inventory and receivables go up, and sales growth is stagnant, not much risk capital interest. Contrarian - as long as Schultz holds 20% and continues to explore LBO, being short is equally dangerous.
Talk about job-related stress for a BBY manager. Could be worse though. Imagine being a stock holder or employed by a publicly traded coal mining company? -
Dude, I don't know if there will be a buyout or not. The extension request happened BEFORE this earnings announcement.
Sentiment: Buy
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