TXU- Largest private equity buyout ever

Quote from Scalper007:

So you think it was by chance that txu ran up for two straight days while the overall market was going down? If that's your opinion, then so be it, but I just can't accept that. Its the same crap that happened in cbss the other day. No one says a word, stock goes up 4 points on huge volume the day before the buyout and the next morning it's bought out.
More...

Right, and who says it wasn't the company doing the buyout buying the shares. What's illegal about that?
 
Quote from sprstpd:

Isn't that the definition of insider trading?
More...

ok I'd like to learn then. I've been scouring the SEC site but am having a hard time finding anything that exactly matches this situation.

I've found lots of good information at these two links:
http://www.sec.gov/news/speech/speecharchive/1998/spch221.htm
http://en.wikipedia.org/wiki/Insider_trading
But nothing that fits this directly. It would appear that third parties can't do this. KKR's lawyers, printers, and even staff can't, individually or through a related party, trade the stock based off "acquir[ing] special knowledge or information by virtue of a confidential or fiduciary relationship". But I don't see anything that says KKR the entity can't buy the stock itself.

What is the difference between a long time shareholder buying out the company vs a short term shareholder doing the same? I'm unable to find any reference to a lockout period where the offering entity can't buy the stock?
 
Quote from damon_achey:

Is it possible that KKR was the one that ran the price up? If I was going to buy something outright at a premium and I had the chance to by part of it lower and then more options on parts of it lower why wouldn't I? (up to the legal limit)

It could move the price substantially, but as long as it's lower than the buyout it's like locking in a small discount and I don't think a conflict of interest.
More...

You are not too familiar on how LBOs work, are you? Or any buyout/acquisitions in general. These are not hostile takeovers.

It's obvious insider trading, it's been going on for years, even SEC had to notate that pre-annoucements are swamped with "unusual options activity". But they are never going to do anything since it's probably the major IB prop desks and their buddy hedge funds who are doing this.

Just more proof that insider trading laws are actually a racket. The privilieged get to do whatever they want at the expense of the rest. It's not like it's mission impossible to get this info, it's just a matter of being able to execute.
 
No I'm not intimately familar with buyouts and I've avoided anything to do with buyouts for the last 7 years because of that.

I'm also not denying that illegal insider trading goes on. What I want to know is that if KKR the entity bought ahead of it's own offer, is that illegal? And if a long time shareholder initiates a buyout is that also illegal? That's it.
 
Damon, I don't know if the company doing the buyout is buying the shares or not. But I do know that gsco, lehm, msco, mlco, best, etc., etc, were all buying CBSS aggressively. I watched best on level 2 refreshing his bid for cbss for maybe 25 minutes at the same price while everyone who has no idea what's going on (except that its up 4 points and that it must drop technically) was trying to short. I can't specifically see IB activity for txu cause I don't see MM id's on nyse level 2. But I'm sure they're there.

Perfectly said Hydro, I couldn't say it better.
 
Quote from damon_achey:

What I want to know is that if KKR the entity bought ahead of it's own offer, is that illegal?
More...

No: up to certain limits, disclosure requirements and stock exchange rules (I think in the 1-2% range max; I'm out of date).

They may well be buying enough stock to cover deal costs if a higher bidder comes in and their deal therefore fails. They are not trying to average the cost down as they expect to pay a hefty premium (20-30%) anyway.

Nobody was forced to sell and some people will always have more information than others.
 
Some of you crack me up. The market was created for this type of activity.

Do you think under the Buttonwood Tree the founders were saying, "we better prohibit real buyers because they might catch some pajama clad day-traders short?

Rather than seeing the activity on the tape would you prefer a stock to open 40% higher out of nowhere?

Buying shares in the open market of a company you're accumulating is hardly dastardly.
 
You must log in or register to reply here.
Back
Top