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Technology Stocks : Hughes Electronics (GMH)

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To: Glenn Petersen who wrote (268)2/8/2003 11:07:33 AM
From: Paul Senior  Read Replies (1) of 277
 
I would guess that GMH would be a good speculative buy if there's a buyout offer. The problem I see, is that last paragraph that begins, "It is possible, however,...." If it's possible (doable and legal) to take control by only buying GM's shares for a premium, then it may not make much sense for an acquirer to make an offer for all the public shares. Especially if GMH stock continues to drift around current levels. Why spend the $7B (according to the article) now on an offer when it could be made later, and maybe even at lower price if GMH has drifted to new lows? I guess that decision has to be weighed by how aggressive the acquirer is (wanting 100% of GMH's future profits), and how much savings there are in having a 100% subsidiary instead of a public company with its public scrutiny and reporting.

jmo.

(I have no position in GMH stock.)

Paul Senior
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