Fred Smith's interview CNBC
#31
Line Holder
Joined APC: Feb 2007
Posts: 65
Market cap for FedEx at the close of market on Friday was 34.82B. http://finance.yahoo.com/q/bc?s=FDX
If someone offers $140-150 a share do you think enough people would sell? I say yes. FedEx is a great Company (also very little union representation except the pilots) and they would be a jewel in somebody’s portfolio. Worst case scenario for you is if DHL buys you and spins off the airline as an ACMI. Don’t tell me that it can't happen, because you don’t have to look much further than ABX and Astar. Read the article below and note that IBM market cap is 145.5B!
http://en.wikipedia.org/wiki/Private_equity
http://blogs.zdnet.com/Foremski/?p=146
IBM, the world's largest computer and IT services company, could become an acquisition target for private equity firms said Steve Bengston, managing director at PricewaterhouseCoopers.
Mr Bengston was speaking at a recent lunch panel on trends and predictions for 2007 organized by FountainBlue. Also on the panel was Fred Greguras, a top lawyer at Fenwick and West, and Rick Ellinger, a venture capitalist with WCA Technology, and myself.
Private equity firms are raising ever larger funds and making ever larger acquisitions, some as large as $35bn, said Mr Bengston. At that rate, it is only a matter of time before even some of the largest tech companies become targets.
IBM has a current market capitalization of about $145.5bn. To take the company private would require a premium to be paid. But several private equity firms could potentially finance such a deal.
"IBM is a perfect candidate for private equity firms, there is a lot of restructuring that could be done," said Mr Bengston.
If such a deal were to happen, the new owners would be free to breakup the company into several large business groups. This is a strategy that IBM considered before Lou Gerstner took over as CEO in 1993. He spent nearly ten years restructuring IBM but keeping its major business groups intact.
#32
Gets Weekends Off
Joined APC: Jun 2006
Posts: 2,223
My comfort horizon here is about five years. Beyond that anything goes. We could be UAL about 1998. I hope I'm wrong, but I watched my dad go through a leveraged buyout at NWA in the eighties. A company that used to write checks for 747's, that owned the hotel they stayed in in NRT, suddenly became 3 billion in debt. Sold everything they owned, leased it all back, then told the employees they were going bankrupt and needed to cut wages 25%.....
#33
Gets Weekends Off
Joined APC: Aug 2006
Position: leaning to the left
Posts: 4,184
You missed the whole point of my initial reply. You wrote:
My point was that it doesn't take Smith(Fred to you) getting old for someone to acquire this outfit. He doesn't own it.
#35
Line Holder
Joined APC: Feb 2007
Posts: 65
Most people know that Fred doesn’t own the company http://finance.yahoo.com/q/mh?s=FDX, but Fred started the company, he is still the boss and if he steps down it might be a natural point in time for a takeover by someone sanctioned by him. If Fred fights a takeover, the probability of its success is much lower since loyal shareholders will listen to him. These are just my opinions, which are worth less than a cup of Starbucks.
#36
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