Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (12525)	5/25/2001 9:41:53 AM
From: jeffbas	Read Replies (3) \| Respond to of 78715

Spek, I don't follow the company but read the WSJ reference. I had a negative reaction to the deal, as a possible sign of dumb management. P&G which is not a stranger to the drug business chose to spend $4.95B for Clairol. BMY chose to sell a business for $3B after taxes which an intelligent buyer (P&G) thought would give a decent return on $4.95B. That means that BMY will have to earn one hell of a return on the $3B to exceed the return it was (or in P&G's thinking should have been) making on Clairol, in order to both make doing the deal worthwhile and to make up over time the $2B just thrown away to Uncle Sam. I doubt it can be done, or if it can, without taking more risk than retaining Clairol represented. I am not impressed at all with this transaction based solely on the info in that WSJ article.