With only six days left 'til Christmas, BI-LO decided to finish its shopping list in a big way, announcing Monday that it was acquiring Winn-Dixie (Nasdaq:WINN) in an all-cash deal. Although some shareholders may lament that BI-LO's acquisition sells short Winn-Dixie's ability to turn itself around, the fact is that getting 85% or 90% of a company's possible value in straight-up, no-risk cash is not such a bad deal.
The Deal
Winn-Dixie announced Monday morning that it had accepted an offer from privately held BI-LO to sell itself for $560 million or $9.50 per share in cash. That price represents a 75% premium to Friday's close, but only tiny premiums on the basis of EV/revenue or EV/EBITDA multiples. (For related reading, see Value Investing Using The Enterprise Multiple.)
Read the full piece here:
http://stocks.investopedia.com/stock-analysis/2011/Winn-Dixie-Gets-An-Early-Gift-WINN-WFM-TGT-WMT-KR-RDS.A-RDS.B1222.aspx
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