U.S. News

Big Shopping List for Private Equity Firms

By CNBC.com

Private equity firms, flush with cash, have not wasted anytime writing up a shopping list.

A second buyout team is reported to be mulling a bid for Britain's third-largest supermarket, J. Sainsbury. And it is likely that private equity groups eyeing the retailer are interested in its property aspects and the possibility of selling stores and leasing them back, Clive Hyman, managing director of Hyman Capital Services, told "Worldwide Exchange."

Private Equity Outlook

“The private equity houses will have to have an angle on the transaction," Hyman said. "They must have a view that there must be some assets that are either underperforming or they can gain some extra value."

Overall, Hyman noted that there is quite a lot of money looking to be invested, but cautioned that just having the cash is not a reason to buy.

“(Former Federal Reserve Chairman Alan) Greenspan may well be right saying there is 'irrational exuberance' when it comes to private equity," he said. "But they shouldn’t be bidding if there isn’t an angle.”