07
03
2008
Archive for March 7th, 2008
Filed under: Deals, Bank of America (BAC), Countrywide Financial (CFC) It’s all very confusing. SRM Capital Management’s Jonathan Wood has blasted Bank of America’s (NYSE: BAC) deal to acquire Countrywide Financial (NYSE: CFC) as being grossly inadequate. Legg Mason Value Trust’s legendary manager Bill Miller concurs. And yet the stock isn’t doing anything to suggest a better deal is coming. In fact, Wall Street has serious questions about whether the deal will close at all. With credit market worries showing few signs of subsiding, Countrywide shares are trading at discount of more than 20% to the value of the deal — an unusually huge arbitrage spread indicating that investors have their doubts about the deal’s future. Over on SeekingAlpha, Richard Shinnick wonders why Bank of America is doing this deal: “Why are you saving Countrywide? Why take this risk? You can build your own national mortgage network! In fact, you already have one! Why do you need this? What are you thinking?” I agree, and also question the value of Countrywide’s national mortgage network. The company has spent nearly 40 years building a strong network and brand, but you have to think that, financial woes aside, the hugely negative press attention has hurt the company’s image. I would argue that the Countrywide name has such a negative connotation as to be worthless. As Warren Buffett has said, “It takes 20 years to build a reputation and 5 minutes to ruin it.” Filed under: Deals, Bank of America (BAC), Countrywide Financial (CFC) It’s all very confusing. SRM Capital Management’s Jonathan Wood has blasted Bank of America’s (NYSE: BAC) deal to acquire Countrywide Financial (NYSE: CFC) as being grossly inadequate. Legg Mason Value Trust’s legendary manager Bill Miller agrees. And yet the stock isn’t doing anything to recommend a better deal is coming. In fact, Wall Street has serious questions about whether the deal will close at all. With credit market worries showing few signs of subsiding, Countrywide shares are trading at discount of more than 20% to the value of the deal — an unusually huge arbitrage spread indicating that investors have their doubts about the deal’s future. Over on SeekingAlpha, Richard Shinnick wonders why Bank of America is doing this deal: “Why are you saving Countrywide? Why take this risk? You can build your own national mortgage network! In fact, you already have one! Why do you need this? What are you thinking?” I agree, and also question the value of Countrywide’s national mortgage network. The company has spent almost 40 years building a strong network and brand, but you’ve to think that, financial woes aside, the hugely negative press attention has injured the company’s image. I would argue that the Countrywide name has such a negative connotation as to be worthless. As Warren Buffett has stated, “It takes 20 years to build a reputation and 5 minutes to ruin it.” Filed under: International markets, Deals, Industry, Competitive strategy, Google (GOOG), Microsoft (MSFT), Yahoo! (YHOO)
According to Reuters, “If the deal goes through, Microsoft stands to gain a leg up over Google from cooperation with Alibaba’s on the web software and Yahoo Japan’s on the web customer base.” The theory may be based on soft reasoning. Yahoo! has been operating in the region for a decade and Google, which entered the market much later, has done fine. In Japan, Google is No.2 in audience behind Yahoo!, according to comScore. Google recently signed a deal to be the default search engine for NTT Docomo (NYSE:DCM) handsets. Docomo is the dominate cellular provider in Japan. Microsoft may pick up relationships with web properties in Asia, but if its search product does not measure up to Google’s that might not matter. Being superior is the best way to get bigger. Buying in won’t guarantee success.
Business Roundtable Business - The Connecticut Post Online business.gov.au home page Business & Small Business Business Resources, Advice and Forms for Large and Small Businesses Cleveland OH Local & Small Business News – Economics & Finance News Business - LA Daily News Business News - Money, Market, Stocks - AOL News South Florida-Broward County, Palm Beach County and Miami business ABC News: Business Index Business News from The Hartford Courant, including Connecticut Business First of Columbus: Local Business News Texas Business Portal Filed under: Deals, TV, General Electric (GE), Time Warner (TWX), Private equity, CBS Corp ‘B’ (CBS), Comcast Cl’A’ (CMCSA)
According to The New York Times‘ DealBook, The Walt Disney Company (NYSE: DIS), CBS Corp. (NYSE: CBS), General Electric Company (NYSE: GE)’s NBC, Time Warner Inc. (NYSE: TWX), Comcast Corp. (NASDAQ: CMCSA) and Liberty Media Inc. (NASDAQ: LINTA) are all vying to purchase the Weather Channel from closely held Landmark Communication. “Also, a handful of private equity firms, including Bain Capital, Providence Equity Partners and Madison Dearborn have reportedly indicated an interest, though they’re unlikely to be serious bidders because of the tight credit markets,” according to the paper. Landmark reportedly is anticipating to get $5 billion for the property though bidders tell the Times that $4 billion is a more realistic figure. I would venture that the company will get the higher figure because properties like this don’t often come on the market. Not only is the cable channel one of the most lucrative, its Web site is wildly popular as well. Unlike CNN, people don’t just tune in when there is big news. Energy traders hang onto the channel’s each word when they make bets on the hugely volatile commodities for oil, natural gas and electricity. People also rely on the company’s forecasts to plan their lives. Moreover, The Weather Channel is in a good position to benefit from the public’s growing interest in global warming. |
Yahoo!’s
Whomever purchases The Weather Channel will probably see nothing but blue skies.ss
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