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Non-Tech : Tyco International Limited (TYC)
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To: blankmind who wrote (3313)5/24/2002 2:46:32 PM
From: Logain Ablar  Read Replies (1) of 3770
 
blankmind:

I'm sure more than Magellan dumped but of course there were willing buyers @ the right price. Problem with management is they are selling CIT into a buyers market.

One, there are not too many companies with the capital base to buy CIT (CIT needs to shore up its balance sheet to improve its credit rating so anyone buying is cognizant of this item). Even GE is having problems with the market and can't do a major financing acquisition or else it will hurt their multiple (one underlying reason for trying to acquire Honeywell last year was to balance income between the manufacturing and finance sides)

If this $5 B offer is true then even if sweetened to say $5.5 B this is $1.6B less than TYC planned. Will the market on an IPO pay more than an investment bank (normally I'd say yes but with all this publicity TYC is put in a bad selling position) so I doubt it.

Probably the best the company can do is bite the bullet and ride out the storm (stock can see and maybe break $10) and prove they can generate the cash to shore up the balance sheet (survival is not in question @ this time).

If the economy moves into recovery mode later this year then maybe sell the company next year when they may get their price.

Doesn't look like they are getting it now.
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