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Uk: Mfi May Be Sold For £1

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!!!!!!!!! :huh:

http://www.kamcity.com/namnews/asp/newsart...sp?newsid=28506

UK: MFI May Be Sold For £1

The newspaper report claims that Merchant, a consortium backed by Goldman Sachs, had now beaten private equity firms Apax Partners and Argyll Partners in the auction. Apparently the offer involves MFI paying Merchant £130m to take the business off its hands and in return the equity firm will make a nominal £1 payment. However, an MFI spokesman said reports of a signed-and-sealed deal were premature.

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Guest Bart of Darkness

I'm hoping they'll knock an extra 20% off in the next sale.

80p seems about right.

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Not a bad deal for management - they will get a lot of sweet equity, without putting much in the pot. From the information memorandum I have seen on it, it's a business that has some fat in it, profitability is not unfeasible and it could be turned round by ruthless new owners (which is what PE people do).

pricewise, it's probably about right, I would have been cheeky and asked for underwriting of some of the debt or to pay some of it off at closing, but given it's a competitive auction, that's unlikely......

I think there's a lot of equity that can be released in the business as well...... [ahem, securitisation, sale and leaseback, surrender of duff leases.....]

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Not a bad deal for management - they will get a lot of sweet equity, without putting much in the pot. From the information memorandum I have seen on it, it's a business that has some fat in it, profitability is not unfeasible and it could be turned round by ruthless new owners (which is what PE people do).

I think there's a lot of equity that can be released in the business as well...... [ahem, securitisation, sale and leaseback, surrender of duff leases.....]

Dump the MFI name and rebrand and there is margin in this deal.

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Not a bad deal for management - they will get a lot of sweet equity, without putting much in the pot. From the information memorandum I have seen on it, it's a business that has some fat in it, profitability is not unfeasible and it could be turned round by ruthless new owners (which is what PE people do).

pricewise, it's probably about right, I would have been cheeky and asked for underwriting of some of the debt or to pay some of it off at closing, but given it's a competitive auction, that's unlikely......

I think there's a lot of equity that can be released in the business as well...... [ahem, securitisation, sale and leaseback, surrender of duff leases.....]

Right, so the biz is easily turn-aroundable, only the management could never manage it, even in the midst of a DIY boom, and yet you think this deal is gonna be sweet for the management. Can you not see that there are logic probs there? If I were buying this company the last thing I'd want are those bunch of losers hanging around, "MBO" or not .... golden handshake at a push, but "sweet equity"??? Hmmm...............

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Right, so the biz is easily turn-aroundable, only the management could never manage it, even in the midst of a DIY boom, and yet you think this deal is gonna be sweet for the management. Can you not see that there are logic probs there? If I were buying this company the last thing I'd want are those bunch of losers hanging around, "MBO" or not .... golden handshake at a push, but "sweet equity"??? Hmmm...............

I take it you don't spend 12 hours a day talking to private equity shops..... - management put zip in, they have taken an underperforming business that they were forced to run a different way as it was part of a group and are able to refinance and restructure - they put in nothing or minimal amount and they take up to 5-10% on an exit (though I guess this is likely to be a secondary buyout). It's much much harder to turn a business otthe good with all new management....

put it this way, MFI is losing money big style - management will be out of a job anyway, go serve new masters - PE fund and have a chance of making it big enough to retire in 5 years strikes me as a relatively low risk strategy unless they have to remortgage big to pay to play...

If you think back, BHS was awful as was Arcadia - did not do Philip Green any harm to take them on.

[plus I have read the information memorandum....]

Edited by Rachman

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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