June 13 - Breakingviews editors explain why Gannett's plan to buy broadcaster Belo and an Indian takeover of Cooper Tire provide a case study for executives everywhere contemplating acquisitions.
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So it is a tale of good emanating batter an -- in the market today. TEPPCO Partners looking at a deal this is -- -- buying Belo which I thought these guys -- newspapers of course yeah barricades. One around the give that is obviously USA today -- -- newspapers around the country. -- used to -- the Dallas morning news but you're telling us this is all about two things one about broadcasters and newspapers its ability on these stations. But really it's about cutting costs and market loves it. -- also -- spun off its newspapers a few years ago it became mostly in this part of the company is entirely broadcast. -- is has been little television channels bet and get a has been moving towards looking to build more and broadcasting because. Of what why doesn't pay services -- -- really ultimately you have to just trying to protect our oil business some sort of a big bite into this deal that shares -- point 3% Y. There's huge synergies and deal. On the talking about a you know a rate that would effectively cover nearly the entire -- obviously they -- it would of the synergies it synergies they talk -- 175 million dollars a year or so if you present value looking at over a billion dollars and what was the premium the premiums. RT. Eight. Percent right so basically that net present value of the future synergies covers the cost nearly got -- -- equity causes certainly covers the freedom of the whole thing oh well yeah okay equity portion of it it does sound like the -- guys that over the weekend what are they getting equity they getting cash in this they're getting cash. Well -- side. I mean you would have thought it would have been a good idea to get -- set that aside now episode does is kind of been the story that we've seen in -- -- do these kind of bread and butter transactions. With a lot of synergies. You know buyers are beginning or words kind of deals with the markets like the flip side of course as the -- yes you look at this other deal that sort of seemed to collapse overnight. This is Apollo tired India. Did highly leveraged transaction their small of course there are Cooper Tire & Rubber in the US similar sized deal -- -- -- -- about two and a half billion dollars. You know -- as you know is that a polish shares of collapse overnight right now over 20% and -- -- -- it could -- -- what happened with Gannett. I'm hearing how the situation is huge because it in the same industries is not bold in that sense but it is as big cross border deal. The Indian companies taking on a lot of debt to get the transaction done other synergies there I'm not sure yet coming -- that much easier Indian company trying to get access the Smart right by. The number eleven -- just you know it's the cross border aspect -- the debt it's you know can rescinding company manages this storied old US tire maker you know it's one of the biggest deals we've seen out of him so he's the -- marketing expect. Or one of the biggest right so I mean so the market is still questioning those kinds of transactions and that's kind of so marketers like -- that no surprise there you know people. It likes plain Vanilla lots of cost cuts. And outsourcing and look at our thanks -- it occasionally got more breaking -- tomorrow.
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