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> now faces interest payments on debt following its sale to Roark and can’t afford to have declining earnings, sources said Is this another leveraged buyout?
by jbm 2y ago
> now faces interest payments on debt following its sale to Roark and can’t afford to have declining earnings, sources said
Is this another leveraged buyout? When are they going to make that illegal? You can't even do that in a game of 18xx, and lord knows those are cut throat enough.
- WorkerBee28474 2y ago> Is this another leveraged buyout? When are they going to make that illegal? Never. Doing a company buyout that is 'leveraged' just means it uses at least $1 in debt. Banning that is impractical and probably deeply harmful to the economy. Furthermore, the 'losers' in an LBO that crashed are first the equity holders, who did the deal, and then maybe debtholders, who were well informed about the risks.
- sundaeofshock 2y agoI guess employees, customers, and the local community don’t count.
- WorkerBee28474 2y agoThe effects may never be felt by employees, customers, and the local community - only the equity and debt holders. If Company X is an LBO target, gets bought out, does poorly, goes bankrupt, and gets sold a for a reduced value it may continue to operate with little change in the day-to-day.
- r00fus 2y agoThis is a joke comment. Most LBOs result in eventual shuttering of the company. The LBO itself is a strip-mine of the assets and value.
- jtbayly 2y agoHow is Roark going to profit from killing Subway, the company they own? What can they strip mine that is more valuable than the largest fast food chain in the world?
- collingreen 2y agoIt's possible they don't mean to kill the golden goose they just accidentally do it by making its cage too small and reducing the quality and quantity of its feed in order to squeeze out a few more bucks.
- alexey-salmin 2y agoFunny how these often make a profitable business unprofitable overnight, even the business itself is the same as before.
- erellsworth 2y agoThat's exactly what it is: https://www.reuters.com/markets/deals/subway-comes-up-with-5-billion-debt-plan-clinch-10-bln-plus-sale-sources-2023-04-30/ https://www.reuters.com/markets/deals/subway-comes-up-with-5...