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Non-Tech : Tyco International Limited (TYC) -- Ignore unavailable to you. Want to Upgrade?

To: GVTucker who wrote (2592)	1/24/2002 9:30:49 AM
From: Elroy	Read Replies (1) \| Respond to of 3770

"By spinning that same CIT (only the name is different now) back off, Tyco shareholders will essentially be losing that premium that Tyco paid to the CIT shareholders." We shall see. TYC did a pretty good job of selling TCM at the high and buying it back at the low. Maybe they know what they're doing. Elroy

To: GVTucker who wrote (2592)	1/24/2002 2:51:52 PM
From: Bob Rudd	Read Replies (1) \| Respond to of 3770

While I haven't looked hard at the CIT purchase, If, as you say, a considerable premium was paid and it will now be spun with no significant value added changes, then it probably was a mistake. But all managers make mistakes [Buffett bought USG just before it slid into bankruptcy for example]. I suspect DK looked at GE as a model with it's enviable multiple and packaged financing and thought: If I had the finance capability, I could get the multiple. It didn't happen. He can't control the market. But he can recognize when a strategy isn't working and change. I think that's a strength. Too many managers marry their mistakes or defend them to the death....of the shareholders wealth. This guy has recognized it's not happening and gone a diffent way to help realize greater shareholder value. Sunk costs don't count...the question is: Does the separation plan make sense and will the markets recognize it? I think the answer to both is yes, but the timing of the latter will probably be delayed until the IPO's are underway. There's a pretty good chance that a strategic control buyer will step up for one or more of the units which would be a premium to the passive market values now estimated. GE, for example, is considered a good possiblity to go for the medical unit.

To: GVTucker who wrote (2592)	1/25/2002 10:17:01 AM
From: Bob Rudd	Read Replies (1) \| Respond to of 3770

This excerpt indicates that TYCO has indeed cleaned up and added value to CIT which recent buzz calls for them to sell outright rather than partially IPO: <<Although Tyco owned Tyco Capital for less than one year, the subsidiary was able to tap the parent's resources to help clean up its balance sheet, including the disposition of over $5 billion of non-core assets, strengthen capital, and accelerate 'right-sizing' initiatives.>> Source: Bloomberg quote.bloomberg.com I would also point out that the very favorable rating Fitch as given confirms a clean bill on TYCO's accounting. Credit analysts are generally more rigorous and sensitive to problem issues than equity analysts and they don't have IB conflicts.