After the monumental IPO last month, Blackstone Group may already be an appealing target for private equity, Slate columnist Daniel Gross suggests.
What makes a good target? Slumping stock, healthy margins, lots of cash, valuable brand name, manageable debt, liability in public ownership. Check, check, check, check, check, check.
There's a final bonus to Blackstone taking Blackstone private. Buyout firms pay substantial fees to the investment bankers who steer them toward targets, and help structure, and negotiate deals. Blackstone, of course, has a well-regarded financial advisory unit. So, Blackstone's partners could essentially pay themselves for advising themselves to take Blackstone private.
Before the IPO, Institutional Investor predicted a Blackstone reprivatization in 2012, but with stock down 25% since June, this may be a conservative estimate. BX is trading down 1.75% today at $25.91.
Blackstone, Meet Blackstone [Slate]
Posted by , Jul 24, 2007 3:06PM
so witty
or not.
Posted by inIT4the$ , Jul 24, 2007 3:09PM
decidedly witty! or someone's just being a smart*ss
Posted by , Jul 24, 2007 3:38PM
same story was in newsweek
Posted by jt , Jul 24, 2007 4:10PM
So total back of the envelope job... they ipo'd at what 35/36, in another few days the stock'll be at/below $25, they could announce a take-out at $30 for a 20% premium, and essentially make roughly $1.4bn + whatever advisory fees they paid themselves. Gee I bet Frank and the other flapping heads in D.C. would looooove that
Posted by Series7.5 , Jul 24, 2007 4:34PM
the ipo price was 31 so thats pretty thin
Posted by jt , Jul 24, 2007 5:10PM
yea like I said back of the envelope, but that just means they'll could wait for the stock to hit $20, the same 20% premium (or even, gasp, 30%) and make the same return + fees. Of course if they did this the backlash from investors would likely far outweigh the one-time windfall profit, but what the heck since when did they ever care about the investors
Should be interesting though when bx gets into earnings season though...
Posted by Random Banker , Jul 24, 2007 5:41PM
Fuck that, I thin Icahn should buy up a stake, clearly this management team is incompetent and new managers should be brought in. Better they could merge with a soon to be be public KKR and fire all of the B-Stone investment professionals.... think of the synergies.
In fact while I'm going down this line of thinking... what's the whole point of this alternative investment "industry" anyway I say we just lump them all into one GIANT Private Hedging Equity Fund .... think of the Synergies on that!!!!... somebody start laying out a few pages...
Posted by , Jul 25, 2007 10:57AM
never ever buy blackstone fuck them
Posted by Zach , Jul 25, 2007 6:27PM
we can all whine about it (I lost a bit of money too) but the blame shouldn't rest entirely on Blackstone. After all - who sold you the shares? If you indicated for the IPO, you actually had time to sell it for a decent profit. If instead you bought in the open market, you should have done due diligence to make sure you understood what you were buying.
take a look at FIG and you realize that the whole sector is getting hit - its more of a macro issue than an individual company issue. Chances are, there will be a point where it swings too far and wonderful buying opportunities exist. We just need to make sure we're not blaming everyone else for our own poor decisions.
Posted by Joe Davis , Jul 27, 2007 5:47PM
Wonderful how they kept the ball in the air until all these deals could be unloaded on the crowd.
Thats why they have the yachts and chauffeurs , and 'you' roller skate to work.