Use access key #2 to skip to page content.

herztical (28.94)

CFC takeover...the greatest trick BAC ever pulled

Recs

5

June 16, 2008 – Comments (10) | RELATED TICKERS: BAC , BSC , CFC

Did anyone else catch BACs statement that they may not buy all of CFCs "debt" and "assets"?  I did. While this deal appears to stink for BAC, I think there's a fantastic chess game going on between BAC and CFC shareholders. The problem is CFC shareholders are only playing with a few pawns and don’t have any alternatives.  I have to give some credit here to BAC management.  If your going to acquire a bank in turmoil, what better way then to take it over before every customer bails and by keeping the current shareholders happy.  BAC has long suggested and reiterated that they will acquire CFC, however all the details have yet to be ironed out. I think if they can unload some of CFCs debt/junk and just cherry pick the goods of CFC, this deal will be the steal of the century. It's basically the Bear saga without all the media attention, the financial fallout, the ruining of a company, and the plummeting of financial markets...good job BAC, check mate.

10 Comments – Post Your Own

#1) On June 16, 2008 at 11:07 PM, Allstar13913 (99.82) wrote:

That's your analysis?  Seriously?

I think Bank of America is trying to weasle out of this deal any way it can.  This thing stinks the whole way around.

 

Mike 

Report this comment
#2) On June 16, 2008 at 11:55 PM, FourthAxis (24.31) wrote:

If it doesn't blow up in their face...Yes.  I wrote about their sketchy CFC takeover dealings back in Jan - Is Bank of America smarter than I think?

Report this comment
#3) On June 17, 2008 at 1:34 AM, kristm (99.74) wrote:

I said before it doesn't all make sense.. As CFC's largest investor, wouldn't BAC be able to cherrypick the company's prime assets after bankruptcy? They own, what, a third of Countrywide already? Just replace the board with people who will give BAC good accounts and eat the bad ones, then go under.

Or are they just trying to preserve their investment into CFC by propping the company up until "the market" recovers? If that's the case then I guess the prime of CFC's assets aren't worth what BAC put into the company. One can speculate that after the ill-advised investment BAC got access to CFC's books and records, the stuff that hasn't been made public, and wet their proverbial pants.

Report this comment
#4) On June 17, 2008 at 9:06 AM, Gemini846 (97.04) wrote:

"One can speculate that after the ill-advised investment BAC got access to CFC's books and records, the stuff that hasn't been made public, and wet their proverbial pants."

 This is pretty safe speculation.

Report this comment
#5) On June 17, 2008 at 1:05 PM, leohaas (98.73) wrote:

"As CFC's largest investor, wouldn't BAC be able to cherrypick the company's prime assets after bankruptcy?"

I don't think so. Investors are last in line when it comes to bankruptcy. They typically get nothing. All assets go to the highest bidder.

But more to the point, what "prime assets" are we talking about?

BAC is best off letting this deal fall through. In the mean time, stay away from BAC! 

Report this comment
#6) On June 17, 2008 at 11:32 PM, herztical (28.94) wrote:

Based on the above posts, that's why this deal will work!  Don't be so short sighted.  Most people are paying their mortgages...are any of you in default? Yes, subprime takes all the headlines but don't miss teh good here...they are acquiring a large company for peanuts.  This deal could have been the WB/Golden West deal a year ago and everyone would have applauded it...time my friends, time

Report this comment
#7) On June 17, 2008 at 11:33 PM, herztical (28.94) wrote:

Based on the above posts, that's why this deal will work!  Don't be so short sighted.  Most people are paying their mortgages...are any of you in default? Yes, subprime takes all the headlines but don't miss teh good here...they are acquiring a large company for peanuts.  This deal could have been the WB/Golden West deal a year ago and everyone would have applauded it...time my friends, time

Report this comment
#8) On June 19, 2008 at 12:10 PM, mandrake66 (98.28) wrote:

I think everyone now sees the WB/Golden West deal for what it was...risky, overpriced, and ill-timed. Or stupid and pointless, to phrase it another way. I think people justifiably see the CFC deal exactly the same way. It would be overpriced if it were free because of all the liabilities it brings. The best thing BAC could do for its stock price is to just walk away.

Report this comment
#9) On June 19, 2008 at 12:56 PM, sabang97 (< 20) wrote:

The WB/GW deal would have been great...IF for a small fraction of the price.  This is what BofA is getting now

Report this comment
#10) On June 19, 2008 at 1:27 PM, garyp (< 20) wrote:

I believe that five years out (2013) this deal will be considered

one of the most lucrative "bailouts" of the sub-prime nightmare !!

Time will tell.

Report this comment

Featured Broker Partners


Advertisement