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Strategies & Market Trends : Value Investing

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To: Michael Burry who wrote (7153)	5/17/1999 9:36:00 AM
From: jeffbas	Read Replies (3) of 78462

Mike, I do not own it any longer, but am absolutely appalled at the takeover price of $55 cash for CSE by NH. Fiat must be absolutely stupid: -Fiat had a $250 million authorization from their own Board to buy more NH stock when it was $10 (but did not buy a lot), and now think it is better for NH to buy CSE at more than 3 times the low. -It would not have been quite so horrible if it were a stock deal as they would have been paying 3 times CSE low with NH stock at 2 times its low. With cash the 3 times is cooked in the books forever. -Cyclical companies should never load up their balance sheets with debt. Before this deal NH had about $1.6B of equity and $2.7B of debt. Now it will be $6.7B of debt! How can any analyst make a case for the stock now with this kind of balance sheet?

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