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Strategies & Market Trends : Value Investing

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To: Paul Senior who wrote (16420)	10/24/2003 2:20:55 PM
From: Bob Rudd	Read Replies (2) of 78520

CE Added to my position @10.47 about 4% below cost of the rest of it. I like situations where a major constituency [arbs] are 'forced' to sell without regard to the value. The enterprise multiples for CE are roughly half that of FDC...thus motivating FDC to make extensive 'adjustments' to accommodate the DOJ. S&P has 'fair value' listed as 21.50 [but that was prior to Visa beating CE for Wells Fargo biz] for whatever that's worth. Methinks the deal isn't dead yet. If FDC makes some accommodations like selling off the NYCE system and makes nice with DOJ there's a good chance it'll get back on track...at least a lot better chance than the current ~$4 deal spread indicates. The arbs don't bet on highly speculative mergers so they are unwinding driving CE down. If CE was too weak to stand alone, the DOJ wouldn't be making such a fuss, so even if the deal is dead, I'd expect CE to do OK. A big chunk of cash helps too. CE faces some competitive challenges as the loss to Visa indicates so this is speculative and my position remains relatively small.

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