Tuesday, July 08, 2008

Oh really?

Cheap valuations augur well for M&A – Business Standard.

Oh, really? Ask who is willing to sell at these valuations. My database has at least a 100 companies that could do well with some capital infusion right now. I have also identified moneybags that could be either strategic industry leaders or private equity financiers. But sellers are lazybones. They still think their stock should be valued at pre-january 08 valuations and it’s just the overall down sentiment that drove down their stock prices.

You can do nothing but wait for them to get real. In the process, the buyers that I had earlier at much higher valuations have now revised their buy price. Who is suffering? Starved of liquidity, their businesses languish eroding their value further. It’s getting harder to find buyers as each day goes by.

When I read such headlines, I search for its author to see if that’s someone I know. If it is, I’d certainly like her to check out a few I-bankers and private equity managers and present their honest views as well.

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