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Dell (if it happens) is just the start of an LBO boom, according to a group of P-E honchos...

Dell (if it happens) is just the start of an LBO boom, according to a group of P-E honchos holding court at Davos. With debt cheap, companies trading at reasonable multiples, and investors dying for yield, the pieces are in place. "There is so much money chasing yield," says Scott Minerd; $10B of debt entering the market from a Dell deal would be like spitting in the ocean.
Comments (3)
  • The problem is though that debt is not cheap on a relative basis, due to cheapened rates (money). Savvy creditors will want more compensation for the risks they're looking at. Perhaps good arguments can be made for Dell, but I'd want to see the prospectus and projections. For a general LBO boom, these relatively low rates have to be sold wholesale to unsuspecting investors, and will lead to losses.
    23 Jan 2013, 03:54 PM Reply Like
  • And a possible increase in unemployment as well? After all, these LBO'ed companies like to get rid of people no?
    23 Jan 2013, 09:25 PM Reply Like
  • I just published an article about this today: http://seekingalpha.co...
    24 Jan 2013, 12:20 AM Reply Like
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