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Seagate Technology Public Limited Company Message Board

  • ww4231 ww4231 Jun 5, 2012 10:56 AM Flag

    Re potential PE deal


    Problem is that a private equity buyout at a large premium to today's prices is not going to happen.
    There has been a new poster(givemeany...) advocating a PE deal, but he has stated it would be at a LOWER price than current prices. I think he estimated $6-7.5 billion. Personally I think he is a closet short, (interesting how he was not called on that), but I do think it builds the case that Private equity people who are smart are not going to pay a premium at this juncture. WHY?
    Because there is so much uncertainty about the business model success with the clear deterioration in the world economies, and what is increasingly looking like a supply shortage created by the floods turning into the common reversal to an eventual balance or even a glut of supply (not to mention the threats to TAM from the industry trends towards tablets etc).
    However you slice it, PE money has no reason to offer all time high money for STX at this point.
    Frankly, anyone who thinks that is even a remote possibility is showing their amateurish level.
    For heck's sake, speak to people in the investment banking world , they will clue you in.
    So people should be careful what they hope for, a PE deal would only happen if the shares are even harder hit and need to be "saved".
    Or as the saying is now going around the street, "Luc (look) out, you have been Luczoed!"

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    • Except you, however they are not favorable! LOL

    • Show us one favorable response any post you made this year.

      Nobody reponds to the village idiot.

    • Total pathlogical lie, show me where I'm still short!

      vikes proven yet again psychopathic liar.

    • Total pathlogical lie, show me where you closed it out!

      Stock ran up 40% after the deal failed ding dong.

      You are still short!

    • went to $9. worked out great.

    • Can you say total pathological liar and village idiot?

      How's that sTX to $10 call if the deal fails working out for you, only 13 more points before you make any money?


    • but you're not talking about the vermin who trot out the PE is buying STX crowd or the 24/7 365 year in year out ALWAYS present criminal conspiracy theorist who have yet to find a single shred of evidence.
      Flies would actually be a step up the evolutionary chain from your ilk - dung feasting amoebas!

    • "Problem is that a private equity buyout at a large premium to today's prices is not going to happen....I think he estimated $6-7.5 billion, but I do think it builds the case that Private equity people who are smart are not going to pay a premium at this juncture'

      You have SFB when it comes to this and other issues, I suspect a hedge fund trader/shill or a day trader who knows far less than he claims.

      FYI, TPG offered $16.50 for Seagate's 480 Million shares in October, 2010. If the share price continues in the low $20s area Seagate's $3.5 B can buy back 150 to 165 M shares. Thus, a takeout offer in the high $20 area would require $7 to $7.5 B.

      The primary rationale for private equity is to make a lot of money quickly. Since I doubt you have any real understanding about how a deal like this works, it's called buying an UNDERValued stock with a strong cash flow outlook.

      FYI, STX only generated $430 M in free cash flow in 2011 following the takeover offer. Last QUARTER, STX posted $803 M in free cash flow with projections calling for $6 B in free cash flow over the next two years. So if PE took STX out after the buyback, the future cash flow coupled with savings on dividend payments and other things PAYS for the acquisition.

      Then private equity can IPO STX again, which even at a discounted value would give them AT LEAST $5 B or more in profits in just a couple of years.


    • No position at all.

      Do know STX well and private equity.

      The price would be lower. and your post points out how STX can be driven lower, if you play off the data you included in your post. We have all witness STX swing from $2.5 billion to $16 billion.

      The premium would take place when STX valuations was back down in the single digit billions. I think 7-10 high range, and 4-7 low range in billions. If Luczo is promising $20 billion in revenue Private Equity has it's DD done for it.

      And now the relationships.

      This has been done before. Luczo to Coulter, Coulter back to Luczo. Seagate to TPG, TPG to Seagate. They both made a lot of money off these exchanges.

      Luczo, CEO Seagate, Stanford MBA, 53 yo.
      Coulter, CEO Founder, Owner of TPG, Stanford MBA 53 yo.

      TPG, Texas Pacific Group. Both live in the San Francisco Bay Area, about 40 minutes from each other. Coulter served on the Board of Directors of Seagate.

      A lot of money. Do you know a CEO that has made as much as Luczo in the last year? Don't include founder CEO's.

      No holdings. Former CEO.

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