Why not file a 10 billion dollar IPO

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B+L likely knew that they would not get 10 billion. They also had to know that an unsuccessful bid would damage the prospect for an IPO. So why did B+L waste everyone's time? Who were they putting on the show for?

Strange.
 






Anonymous said:
B+L likely knew that they would not get 10 billion. They also had to know that an unsuccessful bid would damage the prospect for an IPO. So why did B+L waste everyone's time? Who were they putting on the show for?

Strange.
Click to expand...

Maybe they are planning on asking for a HUGE bank loan. If they are valued at 10 billion they can ask for a lot of money.
 


















B&L is worth a lot less in an IPO then in a sale.

If sold, the buying company can leverage its own infrastructure as well as elminate jobs at B&L to improve the margins of B&L, making it more valueable.

In an IPO the company is worth less because it has to support itself. No distribution or manufacturing benefits, no job cuts. The only benefit to earnings would be the reduction to debt, which would reduce interest expense and improve cash flows, but not improve profitability.

The bidding process gave potential investors a look under the hood and told WP what people thought B&L was worth (ish). I still think an sale would be more profitable for WP than an IPO, though I dont think 10bn is in the cards...I wouldn't be surprised if a sale brough in around 8bn and an IPO brought approximately 7.6 (on the high side).
 




































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