Quote:
Originally Posted by Bogof
A company already $26 billion in debt buying up a company £6 billion debt is just stupid. The guy behind it all Americas biggest land owner has zero personaliabity to these debts.
Why don't Sky just create a $billions debt mountain and buy everything everywhere , or TiVo or any other such company? Oh I'm remember why they reinvest into there network and tv content only for debt riddled badly managed company's to drag them through various ofcom investigations.
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I used to work for a large organisation that used to be involved in mergers and takeovers and one day half the meeting rooms were sectioned off to facilate a deal VERY similar to this. They call it due dilligence. I happened to bump into (literally, holding coffee and cakes) the top person doing the deal and the conversation went a bit like this:
Me: Why is company A buying company B?
Top City Consultant: It's a good deal.
Me: Why is it a good deal? Company A has huge debts and company B has huge debts, I'm obviously missing something here.
Top City Bod: Obviously.
Me: But why is this deal happening, everyone is in debt?
Top City Man: That's good!
Me: No, its not!
Top City Highly Paid Bod: Yes, it is!
Me: How can one company in debt buying another company in debt, be a good thing?
Top City Man: It is very good. Having cash on yer books is a waste of time and tax inefficient. Having cash sitting there on your books doing nothing does no companies any good.
Me: Except, they're not in debt....
Top City Bod: Go get me some more coffee and cakes and then sod off, I'm busy.
Me: Ok
Perhaps I am just thick, but I agree with you bogof. The inner workings of the City are beyond me, even though I worked there all my life!
Debt is debt.