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

To: E_K_S who wrote (39879)	11/2/2010 2:05:21 AM
From: Spekulatius	Read Replies (1) \| Respond to of 78777

re XCO - is this about value or cheap funding. As I see it XCO will cash out their equity stake, reinvest some of it and as all LBO's most of it will be paid in debt, which is cheap right now. Since they get a 50% premium on their equity stake (just like any other stockholder) and most of it will be cashed out, while they also own the equity slice in the LBO (equity slice has all the upside) I don't see how that would not work out for them. That does not mean that XCO is a value (looks like they value XCO @4$MCF in the ground), it just means there is dump money to finance an LBO like that.