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: Paul Senior who wrote (16716)	3/31/2003 5:56:05 PM
From: Jurgis Bekepuris	Respond to of 78486

An immediate issue with ANDW is its acquisition of ALN. ALN did not have high ROE for the last 7 (!) years and it will account for 1/3 of ANDW's new revenue. Consequently, if ANDW does not improve ALN's ROE, ANDW may have its own peak ROE reduced by as much as 1/3. Of course, ANDW suggests the usual merger benefits, however, such a large percentage-wise acquisition is always wrought with peril of culture clashes, executive infighting and nasty surprises. On the other hand, if the acquisition falls through, ANDW would have spent time and resources on the failure. ANDW still looks interesting, but I would lower my potential buy price because of uncertainty and the need to understand 2 companies instead of 1. quicken.com Jurgis - one in a hand beats two in a merger?