Recent Blog Posts
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The Times' Rorshach Geithner Story
Apr 27 20099:04am EDT -
Sinking Animal Spirits
Apr 27 20098:04am EDT -
Counter-cyclical Urban Policy
Apr 26 200910:04am EDT -
Be Your Own Counterfeiter
Apr 26 20099:04am EDT -
Being Tim Geithner
Apr 25 200912:04pm EDT -
Notes From a Press Conference Naif
Apr 25 20099:04am EDT -
What Good is the News?
Apr 25 20098:04am EDT -
Stressful Enough
Apr 24 20092:04pm EDT -
Not Regretting the Pound
Apr 24 20091:04pm EDT -
Introducing the New Ford Squeeze
Apr 24 20099:04am EDT -
Non-Economic Questions of the Day
Apr 24 20099:04am EDT -
The Stress Test Blind Alley
Apr 24 20098:04am EDT -
Happy Hour
Apr 23 20099:04pm EDT -
Recovery Without Rebalancing
Apr 23 20096:04pm EDT -
The Shape of Your Recession
Apr 23 20095:04pm EDT
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How Bear Markets Help M&A Dealmaking
The FT reports on how the Dow-Rohm deal got done so easily:
Dow's $78 per share bid represented a premium of 46 to 47 per cent to Rohm and Haas' share price when the parties first started to negotiate, but as the company's shares sank, that premium widened substantially. Without that market pressure on Rohm and Haas' board, the deal might not have happened, one insider said.
By the time the deal was announced, that $78-per-share bid represented not a 46% premium, but rather a 74% premium. At that point one can see how it would be hard for the Rohm & Haas board to refuse the offer, especially considering that Rohm & Haas has only ever traded above $60 a share for one day back in April.
In other words, if you're a strategic acquirer paying cash, bear markets are your friend, and make it much easier to get deals done. I knew there had to be a silver lining in this bear market somewhere!
Also, a quick note: blogging is going to be slim to nonexistent for the rest of the weekend, as I celebrate my sister's wedding. Here's to Rhian and Andy!
