Word: brascan
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With acquisition in mind, a Toronto investment management company that has $380 million in cash from the sale of a Brazilian utility, found its billion dollar baby in a 5 and 100 store. The company, Brascan, Ltd., announced last week that it was offering $1.1 billion for F.W. Woolworth Co., one of the largest cash takeover bids ever...
...grossly inadequate" and said that it raised "moral and ethical questions of the most serious nature." Woolworth has brushed up its stodgy image by posting record sales of $6.1 billion and earnings of $130 million in the last fiscal year, and it is roughly four times larger than Brascan. To help finance the takeover, Brascan would have to borrow $700 million from the Canadian Imperial Bank of Commerce, which by no small coincidence is also Woolworth's largest lending bank worldwide. In a suit to block the bid, Woolworth charged that Canadian Imperial would never lend such...
...minnow may wind up choking on the whale. In fact, Brascan may well be making its brassy bid in order to become bigger and thus harder to be swallowed up itself by a hostile outsider. Cash-rich firms like Brascan are commonly candidates for acquisition by some larger company that after taking over uses all that cash to finance the deal. Almost the same moment that Brascan revealed its bid for Woolwjrth, Canada's Edper Equities, an investment company that is controlled by Edward and Peter Bronfman, cousins of the Seagram whisky chiefs, said that it wanted to increase...
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