Despite rumors to the contrary, Fools don't necessarily rush in where angels fear to tread.
Granted, the dividend yields on the Big Three automakers are starting to look awfully tempting. Ford
That said, somebody does seem to be finding the valuations compelling -- at least for Daimler. Over in merry ol' England, the venerable Financial Timesreports that one or more private equity funds have made repeated overtures to several of Daimler's major stakeholders. In particular, Deutsche Bank
According to the Financial Times, to date, all of the buyout inquiries have been politely rebuffed. And, in all honesty, it doesn't take much more than a glance at Daimler's recent stock chart to recognize that the market isn't giving good odds on Daimler's getting bought out anytime soon. It would take an enormous amount of financial heft to pull off such an acquisition, because buying Daimler would involve more than just anteing up 40-odd billion dollars; it would also require assuming nearly $100 billion in debt, plus paying a premium for control.
The reluctance of Daimler's owners to even consider a buyout offer suggests that they viewed any bids being bandied about as woefully inadequate. And since you have to assume the bids offered at least some premium, the likelihood is that any buyout offer would have to be truly rich indeed -- probably close to $200 billion -- to win over Daimler's shareholders.
The implications for Foolish investors, therefore, appear twain: On the one hand, Daimler is quite likely selling at a sizeable discount to its intrinsic value -- otherwise, the strategic owners would have at least sat down to discuss the offers at length. But on the other hand, the chance that that value will be realized in an acquisition, a la MCI's imminent absorption into either Qwest
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Fool contributor Rich Smith has no position in any of the companies mentioned in this article.