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Strategies & Market Trends : Roger's 1998 Short Picks -- Ignore unavailable to you. Want to Upgrade?

To: Pancho Villa who wrote (8877)	5/18/1998 3:44:00 AM
From: BelowTheCrowd	Respond to of 18691

> I would not be surprised to see TRV calling off the merger. A few interesting quotes from Barron's today, related generally to the state of mergers in the market, but can be applied specifically to CCI/TRV: ---------------------------------------- And DuPont scored big with investors by announcing plans to sell Conoco. That's right, the same oil and gas company DuPont felt so strongly it couldn't live without , back in 1981, that it judged a bidding war worthwhile. What's going on? As mega investor (and erstwhile investment banker) Lee Cooperman succinctly puts it, Wall Street is "creating backlog for the investment bankers of 20 years from now." Some deals, to be sure, will endure. But the synergies in others are considerably less than obvious. Meanwhile, notes Lee, most acquirers in today's market are paying "$1 to $1.25 for every dollar's worth of assets." That leaves them precious little in the way of a classic value investor's margin of safety, "in a market in which the continuing coexistence of of low interst rates and high profitability is becoming an increasingly difficult bet." Lee knows as well as anyone that almost no one is using real money in today's merger madness, not when they're flush with richly valued shares. Still, he warns: "As a generalization, the guy who sells knows more about what he is selling than the guy who buys...And you usually see big escalations of merger activity when you're approaching market tops." mg