Bull runs, whether in Spain or at the NASDAQ, have a very predictable
course of events… the excitement, the euphoria, as well as the bloodbath that follows. For quite a while, a bull-run led by PE firms is sweeping across markets, like a tsunami at the height of its ferocity. “In 2003, there were only 16 pure private equity listed entities with a daily turnover of more than $1 million & an M-cap greater than $250 million. As of 2007, these numbers have nearly doubled,” says David Blitzer, MD & Chairman, Index Committee, Standard & Poor’s.
The recent buyout offer for Bell Canada (a 127-year-old Canadian telecom operator) by a group of PE firms, for a whopping $48.5 billion is the latest crest of this wave. The offer is the biggest in the history of private equity, outshining the $45 billion acquisition of TXU Corp. by KKR & Texas Pacific Group, Blackstone’s offer of $26 billion for Hilton Hotels & a $22 billion bid for Virgin Media by Carlysle group. A result of this bull-run is overpriced offers with elephantine premiums. Take the Blackstone offer: it represents a 40% premium over Hilton’s closing price the previous day.
course of events… the excitement, the euphoria, as well as the bloodbath that follows. For quite a while, a bull-run led by PE firms is sweeping across markets, like a tsunami at the height of its ferocity. “In 2003, there were only 16 pure private equity listed entities with a daily turnover of more than $1 million & an M-cap greater than $250 million. As of 2007, these numbers have nearly doubled,” says David Blitzer, MD & Chairman, Index Committee, Standard & Poor’s.The recent buyout offer for Bell Canada (a 127-year-old Canadian telecom operator) by a group of PE firms, for a whopping $48.5 billion is the latest crest of this wave. The offer is the biggest in the history of private equity, outshining the $45 billion acquisition of TXU Corp. by KKR & Texas Pacific Group, Blackstone’s offer of $26 billion for Hilton Hotels & a $22 billion bid for Virgin Media by Carlysle group. A result of this bull-run is overpriced offers with elephantine premiums. Take the Blackstone offer: it represents a 40% premium over Hilton’s closing price the previous day.
