May. 24 at 4:41 PM
$UL Isn't it ironic? UL made a deal that's too good for UL's own good
UL made an outrageously advantageous deal with MKC's hungry CEO. MKC's CEO may be an empire builder, or he may be focused on the food business as such - to the apparent detriment of MKC shareholders. Either way, UL made a tremendous deal. Valuing UL's food business highly, UL shareholders are set to obtain
$15.9 billion in cash - and incredibly 65% of the giant new MKC that includes most of UL's current food business. MKC's CEO gets to run the newly enormous food conglomerate. MKC shareholders, meanwhile, end up with only 35% of their own company, which now must find
$15.9 billion to pay UL. MKC had less than
$300 million in cash in the last quarterly report.
Wow. What a deal UL made for their shareholders. As for what's happening to MKC shareholders? Perhaps the less said the better.
UL's deal is just too good. Not surprisingly, MKC shareholders are voting with their feet. And that's the problem for UL.
