H-D sold MV for $3.98? - MVAgusta.net
 
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post #1 of 8 (permalink) Old 08-16-2010, 11:00 AM Thread Starter
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H-D sold MV for $3.98?

WTF?!?! Local Milwaukee paper link.

http://www.jsonline.com/blogs/business/100759404.html
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post #2 of 8 (permalink) Old 08-16-2010, 11:13 AM
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Well, when you factor in deflation since 2008, that's not such a bad price after all.
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post #3 of 8 (permalink) Old 08-16-2010, 11:56 AM
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post #4 of 8 (permalink) Old 08-16-2010, 11:57 AM
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If they sold it it would cost them more to pay off Castioglioni with his 5% ownership.
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post #5 of 8 (permalink) Old 08-17-2010, 03:36 PM
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It's just utterly brilliant isn't it?

Use HD money to fund the new F4, send the yanks broke and buy the company back at a massive profit.

WIN WIN!

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post #6 of 8 (permalink) Old 08-18-2010, 04:46 PM
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$3.98? Really? How did I miss that?

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post #7 of 8 (permalink) Old 08-18-2010, 05:06 PM
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Guys, it is not that simple.

There are always articles and items associated with large transactions (unless you have bought a business lately for around $20 million, you may not be familiar with the nuances of such transactions).

No company would have ever paid cash outright for MV in the first place, in fact there were performance hurdles around the transaction, which HD did not meet. This means, if HD did mot make certain sales, and share these returns with CC, they would owe him a substantial amount. These hurdles were not met, and at expiry, they owe CC $43 million. If the company is valued at about $43,000,004.00 then for a sum of $4, CC could take the company back, and waive the $43 million he is owed.

Not really rocket surgery or brain science...a typical banking transaction, in which HD were the loser....simply because their projections for sales and their subsequent performance was poor. The team at HD who would have advised the transaction and made the sales forecasts are the biggest fools, and the GFC would not have helped!

BrutaleLuke

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post #8 of 8 (permalink) Old 08-20-2010, 06:20 PM
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That's why I always use statistical Monte Carlo simlation during due diligence. Too many acquisitions are based on optimism. I hate optimism. I hate sales reps. I even hate marketeers. Why can't Finance people rule the world ?

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