Comcast, Sunoco ought to be acquired: report
"M&A should start picking up now," and some of Philadelphia's biggest companies are priced to sell, say analysts at Credit Suisse
Comcast, Sunoco ought to be acquired: report
"M&A should start picking up now," and some of Philadelphia's biggest companies are priced to sell, say analysts at Credit Suisse.
Comcast Corp., of Philadelphia, and AmerisourceBergen Corp., Wayne, are among 25 U.S. big companies that ought to attract buyers because they enjoy such high cash flow and low debt that a "hypothetical" new owner "should be able to finance a deal" using the target companies' own money, the team of analysts led by Richard Garthwaite wrote in a report to clients last week.
UK drugmaker GlaxoSmithKline, a major local employer, is also takeover bait, by Credit Suisse's measure. So are Dell, Nike, Pepsico, Walt Disney and healthcare stocks like Amgen, Cardinal, Coventry, and Unitedhealth. Separately, Philadelphia oil refiner Sunoco and Pittsburgh-based United States Steel are among 10 industrial companies that should draw buyers, in part because their market prices are below plant "replacement value."
Credit Suisse isn't saying Comcast will sell next week, or ever. It's just looking at financial data, not at "blocking stakes" such as Comcast chief executive Brian Roberts' supersize voting power, which prevents Roberts from selling Comcast until he wants to, no matter how good a deal would be for his investors.
Why are we talking merger at all? Isn't the economy slow, aren't banks reluctant to finance deals? "The worst recession in 70 years" and deep expense cuts has left US companies "setting the stage for a surge in mergers and acquisitions" as they "pile up cash" in a time of low interest rates, writes Bloomberg News, citing the CreditSuisse report, here. Today's $3.9 billion Dell-Perot Systems deal, and Kraft's recent offer for Cadbury, also feed deal speculation.
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kelprod1 – I want to thank you for standing up for those of us that drive the economy and are yet consistently labeled as greedy or evil. I’m also successful midsized business owner of a real estate, construction and property management company. We need to be true to our belief in the free market economic system, fighting the socialist push at all costs. I’ve held steady to capitalist values, for example as the labor market has changed over the past year or so I’ve been effectively taking advantage decreasing operating costs, boosting the company’s bottom line and increasing my personal wealth. Since this time last year I’ve been able to reduce wages by over 18% and benefits by 30% (reduced PTO and healthcare package). Even with these cuts I’m still looking at a turnover rate of less than 10% due to the poor job market and ironclad non compete clause. Thanks to the free market my personal income will see a nice increase this year which I’ve used to stimulate the economy the capitalist way by spending my money on a new vacation house, boat, couple of cars, etc. The system doesn’t need to change, keep things the way they are, the strong succeed and the weak fail.— Free Market Capitalist- kelprod1 - well said. all these other posters, sans onedayatatime, can go to hell.— Lunchboy
- I think SUNOCO is closing the refinery because it is in dire need of expensive repairs and maintenance. Also it will help drive up the cost of gasoline because (same old excuse) we don't have enough refineries. Middle class here it comes agains.— jtw
