The Children's Beverage Group (TCBG) Message Board

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Non-Tech : The Children's Beverage Group (TCBG)

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To: Fast_Eddie who wrote (1580)	8/20/1998 5:19:00 PM
From: AC Flyer	Read Replies (1) of 2452

Ha ha ha. Hee hee hee. How prescient. And are you the possessor of ESP? Or are you, as I asked, one of the six guys in a basement pumping this stock? Let's take a look at this "unsolicited cash offer" to Nestle for Juicy Juice. When the business development guys at Nestle pick themselves up off the floor having laughed their a**es off, if they actually take this offer seriously, they would want 10 or 12 times EBITDA for Juicy Juice. I'm guessing, but that number would be somewhere in the $300 to $400 million range. And let's say that TCBG gets 4 to 1 leverage on the acquisition (i.e. 80% debt). Well, that's $60 to $80 million in equity. TCBG shareholders will be looking at 10+ to 1 dilution - maybe much more. What they'll own is a highly leveraged branded juice company with moderate growth prospects. Anyone up for that? The value (if there is any) in TCBG is in the innovative packaging and third party packaging contracts and the resulting internal growth. I'm troubled. Either Jon is a megalomaniac, or someone is so desperate to get the stock price up so that they can dump their shares that they'll try anything. It's looking grim for TCBG longs, either way.

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