Archive for December 14th, 2007
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Business Personal Finance. Seniors face high-pressure sales tactics on … Selling off your life insurance might be a bad policy
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In a column sure to spark debate, not to mention some arguments around many holiday dinner tables, Robert H Frank writes in today’s New York Times that Americans’ “inability to speak sensibly about taxes” has helped nudge the United States “toward second-class status in the world economy.” Nobody likes paying taxes. And none of us… Fore more visit Source:dontmesswithtaxes.typepad.com
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 Pillsbury has told a New York food co-op to stop using the phrase “bake-off” because they own it. Pillsbury coined the phrase back in 1949 (according to this unverifiable web source), and then trademarked it in the early 1970s (according to another). Now you know. (Thanks to Sarah!)
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“Group can’t use the term ‘bake off’”[News10Now]
Bake-Off official site
 
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Filed under: Rumors, Financials and analyticals, Engagements
 Earlier this month, rumors hit the market that United Airlines (NYSE: UAUA) and Delta Air Lines (NYSE: DAL) were considering a possible merger. Shortly afterward, Delta officially denied the rumors, but not surprisingly, United Airlines CEO Glen Tilton did not deny that they were considering merger options, as many industry analysts believe that United is the perfect company for a possible merger.
The airline, which took flight in 1930, filed for bankruptcy following the 2001 terrorist attacks and has appeared to be preparing for a sale ever since emerging from its bankruptcy proceedings. United came out of bankruptcy last year, but the company is still up to its eyeballs in debt, and boasts a miserable 2% profit margin over the past year.
When looking at United a couple of factors jump out at you pointing to the notion that the company feels a merger is the best avenue to explore:
- Unlike most of the other huge airline companies, United has decided not to add to its fleet. Currently the company has 460 jets in its fleet and it plans to rely on this existing fleet until 2015 or 2016. By this time, the company’s planes will have an average age of twenty years. According to the company’s official statement, it is just waiting for the next generation of planes, but to industry insiders this is a red flag that the company is trying to make sure it remains as favorable as possible to a takeover, and a long list of plane orders won’t help that goal.
- The company has been looking at ways to get as much debt as it possibly can off the table. It is considering the possibility of selling off its frequent flyer program, worth about $7.5 billion. Think about that United currently has a market cap of slightly under $5 billion.
- It is also considering the sale of its partial ownership in its maintenance operations along with a possible sale of its cargo business to private-equity investors, bringing in billions in cash and, once again, making the company more favorable to a possible buyer.
Industry insiders have estimated that after the possible spin-offs, the company’s stock value could balloon up towards $80 a share. That would be right at a 100% jump from its current selling price of $40.15 a share.
What are your thoughts? Should United look for a favorable suitor?
[Photo: Tsch
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Filed under: Rumors, Financials and analyticals, Engagements
Earlier this month, rumors hit the market that United Airlines (NYSE: UAUA) and Delta Air Lines (NYSE: DAL) were considering a possible merger. Shortly afterward, Delta officially denied the rumors, but not surprisingly, United Airlines CEO Glen Tilton didn’t deny that they were considering merger options, as many industry analysts believe that United is the perfect company for a possible merger.
The airline, which took flight in 1930, filed for bankruptcy following the 2001 terrorist attacks and has appeared to be preparing for a sale ever since emerging from its bankruptcy proceedings. United came out of bankruptcy last year, but the company is still up to its eyeballs in debt, and boasts a miserable 2% profit margin over the past year.
When looking at United a couple of factors jump out at you pointing to the notion that the company feels a merger is the ideal avenue to explore:
- Unlike most of the other large airline companies, United has decided not to add to its fleet. Currently the company has 460 jets in its fleet and it plans to rely on this existing fleet until 2015 or 2016. By this time, the company’s planes will have an average age of twenty years. According to the company’s official statement, it is just waiting for the next generation of planes, but to industry insiders this is a red flag that the company is trying to make sure it remains as favorable as possible to a takeover, and a long list of plane orders will not help that goal.
- The company has been looking at ways to get as much debt as it possibly can off the table. It is considering the possibility of selling off its frequent flyer program, worth about $7.5 billion. Think about that United currently has a market cap of slightly under $5 billion.
- It is also considering the sale of its partial ownership in its maintenance operations along with a possible sale of its cargo business to private-equity investors, bringing in billions in cash and, once again, making the company more favorable to a possible buyer.
Industry insiders have estimated that after the possible spin-offs, the company’s stock value could balloon up towards $80 a share. That would be right at a 100% jump from its current selling price of $40.15 a share.
What are your thoughts? Should United look for a favorable suitor?
[Photo: Tsch
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Filed under: KKR, Financials and analyticals
Back in late September, KKR closed one of the largest buyouts in history - the $29 billion transaction for First Data, which is a leading payments processing operator.
Although the company is private, it is still publishing its financials and is having quarterly conference calls. So how are things going?
For the first nine months of 2007, revenues increased 15% to $5.9 billion and adjusted EBITDA was $1.8 billion (up 7%).
In fact, First Data’s new CEO, Michael Capellas, also provided his go-to-market strategy - shedding some light on what happens in post-buyout environments.
First of all, he wants to find ways to increase organic growth. To this end, there will be more emphasis on bolstering the sales force - as well as finding ways to cross-sell offerings.
Next, the company wants to bring new product innovations to market (hey, it means more cross-selling, right?) Some of the areas include mobile ecommerce, analytics, and fraud detection.
Another large opportunity is the growth in emerging markets. Interestingly enough, Capellas isn’t looking for acquisitions to bulk things up on this front.
Finally, Capellas will try to cut lots of costs. Going into 2008, he thinks he has the ability to slash $200 million in annual costs.
And, this means layoffs - about 6% of the workforce. Yes, some things never change.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements
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Filed under: KKR, Financials and analyticals
Back in late September, KKR closed one of the largest buyouts in history - the $29 billion transaction for First Data, which is a leading payments processing operator.
Even though the company is private, it is still publishing its financials and is having quarterly conference calls. So how are things going?
For the first nine months of 2007, revenues increased 15% to $5.9 billion and adjusted EBITDA was $1.8 billion (up 7%).
In fact, First Data’s new CEO, Michael Capellas, also provided his go-to-market strategy - shedding some light on what happens in post-buyout environments.
First of all, he wants to find ways to increase organic growth. To this end, there will be more emphasis on bolstering the sales force - as well as finding ways to cross-sell offerings.
Next, the company wants to bring new product innovations to market (hey, it means more cross-selling, right?) Some of the areas include mobile ecommerce, analytics, and fraud detection.
Another big opportunity is the growth in emerging markets. Interestingly enough, Capellas isn’t looking for acquisitions to bulk things up on this front.
Finally, Capellas will try to cut lots of costs. Going into 2008, he thinks he can slash $200 million in annual costs.
And, this means layoffs - about 6% of the workforce. Yes, some things never change.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements
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Filed under: Financials and analyticals
 There was lots of trepidation on the eve of Fortress Investment Group’s (NYSE: FIG) Q3 earnings report yesterday. After all, Blackstone (NYSE: BX) disappointed the Street.
Well, there was some relief (it also helped that there was a huge rally in equities). The company, which operates private equity and hedge funds, posted a net loss of $38 million, or $0.52 per share in Q3. Even though, if you strip various elements — such as certain tax and compensation — the firm earned $111 million, or $0.19 per share (which is known as pretax distributable earnings).
It was a relief that Fortress indicated there was little exposure to the subprime mess. If anything, the firm sees opportunities in the sector.
In fact, Fortress has some big plans. The firm is in the process of raising funds, with assets of $10 billion to $15 billion. The initiatives will range from infrastructure, commodities, emerging markets and Asian real estate.
What’s more, Fortress had a nice realization on its Crown Castle investment. The original investment came in 2002, which involved an initial $120 million stake. The total proceeds since then? A cool $1.7 billion.
Yes, it’s a reminder that the private equity business can be very enticing indeed.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the web Guide to Decoding Financial Statements . He also operates DealProfiles.com.
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Filed under: Financials and analyticals
There was lots of trepidation on the eve of Fortress Investment Group’s (NYSE: FIG) Q3 earnings report yesterday. After all, Blackstone (NYSE: BX) disappointed the Street.
Well, there was some relief (it also helped that there was a huge rally in equities). The company, which operates private equity and hedge funds, posted a net loss of $38 million, or $0.52 per share in Q3. Although, if you strip various elements — such as certain tax and compensation — the firm earned $111 million, or $0.19 per share (which is known as pretax distributable earnings).
It was a relief that Fortress indicated there was little exposure to the subprime mess. If anything, the firm sees opportunities in the sector.
In fact, Fortress has some big plans. The firm is in the process of raising funds, with assets of $10 billion to $15 billion. The initiatives will range from infrastructure, commodities, emerging markets and Asian real estate.
What’s more, Fortress had a nice realization on its Crown Castle investment. The original investment came in 2002, which involved an initial $120 million stake. The total proceeds since then? A cool $1.7 billion.
Yes, it’s a reminder that the private equity business can be very enticing indeed.
Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar On the internet Guide to Decoding Financial Statements. He also operates DealProfiles.com.
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