Power and Money

Private Equity Targets and the $100B LBO


My, how things have changed... A matter of months ago, talk of the $100b leveraged buyout seemed rampant. In newspapers and on TV (and admittedly, on CNBC), there was prattle about private equity deals reaching gargantuan proportions. My friend and colleague Dylan Ratigan and I even had a bet going on how big the deals would get in 2007.

And now, two big investment banks seem to be backing my side of the bet. Merrill Lynch, on a $100b buyout, saying: "the probability of such events occurring is less than generally thought." Morgan Stanley, meantime, saying a deal of that size would be "heroic." (Dylan, when can I collect my $5?)

So what are the big targets these days? Dow Chemical, according to Morgan Stanley's May LBO screen, could be valued at $65b. The CEO though, denying the company is interested in a buyout. Here are some more takeover candidates:

Merrill Lynch's LBO List:

  • Molson Coors Brewing
  • CenturyTel
  • Archers Daniels Midland
  • Constellation Energy
  • AmerisourceBergen Corp. 
  • ConAgra Foods Inc. 
  • Pinnacle West Capital Corp. 
  • Union Pacific Corp.
  • Dover Corp. 
  • Forest Laboratories Inc. 
  • Bemis Co Inc. 
  • Gap Inc. 
  • KeySpan Corp. 
  • Murphy Oil Corp. 
  • Costco Wholesale Corp.
  • Danaher Corp.
  • Electronic Arts Inc

Morgan Stanley's LBO List (partial):

  • Alltel
  • Avery Dennison
  • Cytec
  • Dow Chemical
  • Jones Apparel
  • Lockheed Martin
  • Noble Energy
  • Northrop Grumman
  • Sara Lee
  • XTO Energy

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