Posts filed under “M&A”

A Very Expensive Berkshire/Goldman Deal

If you missed last night’s discussion on the "vote of confidence" deal from Warren Buffett, you are missing the big picture. Go read:  Berkshire to GS: "I Got $5 Billion, but Its Gonna Cost Ya."

The headline writers of both the NYT and the WSJ missed the numbers involved:

NYT: Buffett Deal at Goldman Is Seen as a Sign of Confidence

WSJ:  Move by Famed Investor’s Is Seen as a Vote of Confidence in Crisis-Stricken Banking System

Doug Kass goes last night’s analysis one better, and notes that using a Black Scholes produces a valuation of $2.8 billion dollars for the warrants. That makes the effective yield over 20% on the preferred purchase.

As we noted last night, this is terrific for Buffett, who smelled blood in the water. Its a tough deal for Goldman, who were a) obviously in a bind for capital; and 2) smart enough to learn from Lehman Brothers mistakes.

Category: Bailouts, M&A

Berkshire to GS: “I Got $5 Billion, but Its Gonna Cost Ya”

Bloomberg:

Goldman Sachs Group Inc. will raise at least $7.5 billion from Warren Buffett’s Berkshire Hathaway Inc. and public investors in a bid to quell concerns that pushed up the Wall Street firm’s borrowing costs and hurt its stock.

Berkshire is buying $5 billion of perpetual preferred shares, New York-based Goldman said today in a statement. Goldman, which this week transformed itself from the biggest U.S. securities firm to the fourth-largest bank by assets, also plans to raise at least $2.5 billion by selling common stock in a public offering.

Goldman Chief Executive Officer Lloyd Blankfein is turning to Buffett, the billionaire investor and second-wealthiest American, to boost market confidence even though Goldman hasn’t reported a quarterly loss since it went public in 1999. The bankruptcy of Lehman Brothers Holdings Inc. and emergency sale of Merrill Lynch & Co. to Bank of America Corp. on Sept. 15 have fueled fears about firms that rely on bond markets for funding.

Category: Corporate Management, Credit, Finance, M&A, Psychology

SIPC: Lehman To Be Liquidated

Category: Corporate Management, Credit, Legal, M&A, Short Selling, Valuation

Merger Rumors, Shotgun Weddings

Category: Bailouts, Credit, M&A

My Mea Culpa on Thain

Category: Bailouts, Corporate Management, Credit, M&A, Valuation

Lehman Gets PE Bid; Friday Night Fed Meeting

Category: Bailouts, Corporate Management, Credit, M&A, Valuation

Lehman Bailout This Weekend?

Category: Bailouts, Credit, M&A, Valuation

Fannie + Freddie = Frannie ?

Category: Bailouts, Credit, M&A, Real Estate

Bove: Fuld Has Three Days to Solve Lehman’s Problems

Richard Bove, an analyst at Ladenburg Thalmann & Co., talks about the possible sale of Lehman Brothers Holdings Inc. or some of its assets. Korea Development Bank said it’s "considering" an investment in the company and is "open" to an acquisition, according to a Reuters report. Lehman is the fourth-biggest U.S. securities firm.

click for video
Bove_leh

00:00 Potential bidders for Lehman
01:24 Fuld has "run out of options."          
02:52 Potential share valuation in transaction

Running time 03:31

Source:
Bove Says Fuld Has Three Days to Solve Lehman’s Problems: Video
Aug. 22 (Bloomberg,  August 22, 2008 11:17 EDT
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awb.LjDNxr7M

Category: Credit, Finance, M&A, Video

Bove: Fuld Has Three Days to Solve Lehman’s Problems

Richard Bove, an analyst at Ladenburg Thalmann & Co., talks about the possible sale of Lehman Brothers Holdings Inc. or some of its assets. Korea Development Bank said it’s "considering" an investment in the company and is "open" to an acquisition, according to a Reuters report. Lehman is the fourth-biggest U.S. securities firm.

click for video
Bove_leh

00:00 Potential bidders for Lehman
01:24 Fuld has "run out of options."          
02:52 Potential share valuation in transaction

Running time 03:31

Source:
Bove Says Fuld Has Three Days to Solve Lehman’s Problems: Video
Aug. 22 (Bloomberg,  August 22, 2008 11:17 EDT
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=awb.LjDNxr7M

Category: Credit, Finance, M&A, Video