October 25, 2010
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Before sunrise this morning, CommScope (NYSE: CTV ) confirmed it was in talks to be taken private by The Carlyle Group in a buyout priced at $31.50 per share. The stock surged more than 30% on the news.
So what: Carlyle has been busy in recent months. In July, it agreed to purchase vitamin supplier NBTY for $3.8 billion. So while no agreement has been reached as of this writing, given Carlyle's history, it's reasonable to expect one.
Now what: In announcing the negotiations, CommScope may be trying to entice a white knight into making a better offer. Trouble is, competitors such as General Cable (NYSE: BGC ) and Powerwave Technologies (Nasdaq: PWAV ) aren't nearly as well capitalized as Carlyle is, and customers such as Alcatel-Lucent (NYSE: ALU ) and Comcast (Nasdaq: CMCSA ) already have too much debt.
Interested in more info on CommScope? Add it to your watchlist here by clicking here.