RE:RE:RE:RE:RE:RE:RE:RE:RE:IPO deal my thoughtsThis is just an asset sale to the public as opposed to a private entity. No change to ALA. They are exchanging $1 billion in assets for $1 billion in cash. Should not make an impact. I only really disagreed with the $1 billion reduction in ALA value ($4 per share). The $1 billion comes from the IPO. Outside cash infusion. By some of the same faulty logic, the sale of the NW BC hydro assets for just under $1 billion should also reduce ALAs value by $4. It doesn't.
4phuqsakes wrote: So the Billion goes to the (smaller by $1B) ALA and out the door to pay down debt. What is left is a (smaller by $!B) ALA with lesser debt. No new value is created.
(So why did they do it. Well, the gamble is that the smaller cleaner lower debt balance sheet company is more attractive to shareholders, who then are willing to pay a higher multiple. Except the balance sheet isn't really cleaner - arguably it is complicated by the creation of the sub.)
Lansing76 wrote: It goes in the pocket of ALA. The company. If not, then who's pocket does the $1 billion go into? Shareholders pocket? Same thing. Unless they announce a special dividend it stays in the pocket of ALA. On dragons den they use the equity to pay off debt or invest in the business. Not to go to Hawaii.