In American Greetings Deal, Echoes of Larger Buyout for Dell

AUGUST 6, 2013, 6:34 PM

In American Greetings Deal, Echoes of Larger Buyout for Dell

By STEVEN DAVIDOFF

This is a tale of two management-led buyouts. The first is the headline-grabbing $24.4 billion bid by Michael S. Dell and the private equity firm Silver Lake Partners to buy the personal computer maker that Mr. Dell founded. The second is the lesser-known $612 million buyout by the Weiss family of the American Greetings Corporation, the greeting card company they control. Both deals illustrate the rising tide of shareholder power, as well as the devilish issues that emerge when management tries to buy a public company. And even though Dell’s board has changed the voting rules, both companies are being tested by shareholders who view the buyouts as undervaluing their companies. Read more of this post

Washington Post Co.’s Real Star Asset: A Massive Pension Fund

August 5, 2013, 6:45 PM

Washington Post Co.’s Real Star Asset: A Massive Pension Fund

By Tom Gara

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The Washington PostWPO -0.91% Company is best known for its flagshipnewspaper title sold today to a company controlled by Amazon founder Jeff Bezos, but it makes its big money from less prominent sources: A for-profit education business, cable television, and local TV stations. But while all these assets have their merits, here is one asset that gets much less attention: its hugely over-funded pension. At a time when pension obligations are becoming giant financial drag on some of America’s best known companies – such a drag, in some cases, that the pension funds end up owning significant chunks of the business — having a hugely over-funded pension plan is a pretty sweet spot to be in. Here are the details, via the company’s 2012 annual report: That’s a pension plan that owes its recipients just under $1.47 billion, but has $2.07 billion in assets — in other words, it is over-funded by a cool $604 million. Read more of this post

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