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PCC Message Board

  • charlesranders charlesranders Jun 6, 2012 10:47 AM Flag

    Is the annuity cost too high?

    It may very well be that the family demands for a high cost annuity (ie: fat departure bonus) will kill any deal for a buyout.

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    • The family demands are at the expense of shareholders, not the acquiring Company, so I don't think their parachute would kill the deal; it would only shave the price. The value lies in the loans, not the cash, which they would acquire at a slight discount. The enterprise value would more than compensate for the discount.
      However, I think their recent disclosure is all smoke and mirrors. I think the family may be the acquirer with outside financing and they're taking the Company private.